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Wednesday 17 April 2013
Alien Pleads Guilty to Smuggling Luxury Watches from the Dominican Republic to Sell in Downtown MiamiRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Alysa D. Erichs, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (ICE-HSI), announce that Marcos Ferrando, 29, of Santo Domingo, Dominican Republic, pled guilty yesterday to charges of illegally attempting to smuggle and clandestinely introduce into the United States luxury watches, in violation of Title 18, United States Code, Sections 545 and 2.
U.S. District Judge Donald Middlebrooks accepted Ferrando’s plea and adjudicated him guilty of the offense. Judge Middlebrooks sentenced Ferrando to 100 days imprisonment, followed by reporting to immigration authorities for deportation. Ferrando also agreed to forfeit the watches.
According to statements made in court, Ferrando admitted that on January 31, 2013, he and his wife arrived at Miami International Airport on a commercial flight from the Dominican Republic. Ferrando’s wife completed a Spanish-language binding customs declaration form on behalf of the couple. In response to a question asking if Ferrando and his wife were carrying any articles to be sold in the United States, they answered “no.” For the total value of all items that would remain in the United States, Ferrando and his wife listed nothing. The government estimates the value of the watches to be approximately $400,000.00, and the customs duties owed to be about $20,000.00.
During inspection of Ferrando’s luggage by Customs and Border Protection (CBP), an Officer discovered twelve (12) Audemars Piguet manufacturer manuals and warranties. Further inspection of Ferrando’s luggage revealed four (4) Audemars Piguet men’s watches in his carry-on bag and three (3) Audemars Piguet men’s watches concealed in a sunglasses case in his wife’s carry-on handbag. Both Ferrando and his wife were also each wearing an Audemars Piguet men’s watch. The model number on six (6) of the watches matched the model number on six (6) of the twelve (12) manuals in Ferrando’s possession.
During a later interview with a Special Agent from the Department of Homeland Security, Ferrando stated that all nine (9) of the watches belonged to him and admitted that he had planned to sell all nine (9) watches to a buyer in downtown Miami.
Mr. Ferrer commended the joint efforts of ICE-HSI and CBP. The case was prosecuted by Assistant U.S. Attorney Robert T. Watson.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Air Conditioner Thief Sentenced to Six-And-A-Half Years in Federal Prison for Damaging EnvironmentRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that Alexander Morrissette, age 27, of Monroe, Georgia was sentenced today in Macon, Georgia, by the Honorable C. Ashley Royal, Chief Judge for the United States District Court for the Middle District of Georgia. Morrissette had earlier pleaded guilty to two counts of knowingly releasing ozone-depleting substances into the environment. Chief Judge Royal sentenced Morrissette to 78 months in federal prison. There is no parole in the federal system and the term of imprisonment is to be followed by 3 years of supervised release. Morrissette was ordered to make restitution of $178,846.81, the amount of money needed to repair several commercial air conditioners illegally harvested for scrap metal. Randall Scott Wimpey, a Co-Defendant, age 31, of Snellville, Georgia, was previously sentenced to 15 months in federal prison by Chief Judge Royal on February 20, 2013, in Athens, Georgia.
"These defendants destroyed several industrial-sized air conditioning units to steal copper and aluminum parts to sell for scrap metal," said United States Attorney Michael Moore. "Their crimes not only caused property damage to a business and a church, it resulted in harm to the environment by releasing ozone-depleting refrigerant into the atmosphere, harming all of us."
"All life on earth depends on a healthy ozone layer in the stratosphere. If that layer is depleted, the sun's ultraviolet radiation can cause skin cancer, cataracts and suppression of the immune system," said Maureen O'Mara, Special Agent in Charge of EPA's criminal enforcement program in Georgia. "Through the illegal selling of air conditioner parts, the defendants violated the Clean Air Act, whose primary purpose is to protect human health. This case is another good example of EPA's continuing efforts with state and local partners to investigate and prosecute illegal activity that places public safety in jeopardy."
The case was investigated by the Special Agents of the Environmental Protection Agency and the Monroe Police Department. The case was prosecuted by Assistant United States Attorney Danial E. Bennett.
Inquiries regarding the case should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney’s Office at (478) 621-2601.
24 Current and Former IRS Employees Indicted for Benefits FraudRead the Press Release
Memphis, TN – United States Attorney Edward L. Stanton III and Shelby County District Attorney General Amy Weirich announced today that 24 current and former employees of the Internal Revenue Service have been charged for crimes relating to fraudulently obtaining more than $250,000 in government benefits.
Thirteen of the current and former IRS employees have been charged federally with making false statements to obtain unemployment insurance payments, food stamps, welfare, and housing vouchers. All thirteen, individually charged in separate indictments, are alleged to have falsely stated that they were unemployed while applying for or recertifying those government benefits.
“According to the allegations in the indictment, while these IRS employees were supposed to be serving the public, they were instead brazenly stealing from law-abiding American taxpayers,” said U.S. Attorney Edward L. Stanton III. “These charges demonstrate our unwavering resolve to work with our law enforcement partners and hold accountable anyone who fraudulently obtains government benefits and violates the public’s trust.”
The 13 IRS employees charged are Angela Allison, 37; Jessica Davis, 35; Serina Gaither, 37; Lillian Hamilton, 36; Teresa Jenkins, 46; Joanne Johnson, 46; Angela Scales, 28; Dorothy Simmons, 35; Mary Weeks, 61; Evonna Yarbrough, 42, all of Memphis; Gale Baker, 54, of Cordova, TN; Shari House, 45, of Jackson, TN; and Talaria Mitchell, 35, of Southhaven, MS. Each has been charged with multiple counts of false statements, in violation of Section 1001 of Title 18 of the United States Code. A conviction under that statute can result in up to five years in prison.
The charges resulted from cooperation between numerous federal and state agencies. In addition to the U.S. Attorney’s Office and the Shelby County District Attorney General’s Office, the investigation involved the U.S. Department of Treasury Inspector General for Tax Administration; the U.S. Department of Labor Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; the U.S. Department of Agriculture Office of Inspector General; the U.S. Department of Housing and Urban Development Office of Inspector General; the United State Marshals Service; the Tennessee Department of Labor and Workforce Development; the Tennessee Department of Human Services; the Shelby County Sheriff’s Office; and the Memphis Housing Authority.
Eleven other former and current IRS employees were charged by the District Attorney General’s Office with theft of property over $1,000, a class D felony.
“The taxes that we pay are supposed to support our nation and assist individuals in need, not free-loaders who are gaming the system,” said District Attorney General Amy Weirich. “Taxpayers can take comfort in knowing that we take these matters seriously and that we will prosecute these individuals to the fullest extent possible.”
The 11 charged by the state are Raya Banks, 47; Clara Cannon, 61; Alma Childers, 64; Cathryn Fair, 50; Robert Graves, 60; Mechell Hampton, 35; Nicole Nickson, 39; Diane Malone, 56; Myra Thompson, 32; Katina Thurman, 39; and Pamela Williams, 47, all of Memphis.
The federal cases are being prosecuted for the United States Attorney’s Office by Assistant United States Attorney Jonathan Skrmetti. The state cases are being prosecuted for the Shelby County District Attorney General’s Office by Kirby May.# # # #
The charges and allegations contained in the indictment are merely accusations, and the defendants are considered innocent unless and until proven guilty.
Tuesday 16 April 2013
Woman Sentenced for Her Role in Hold-up of Citizens Bank in HutchinsonRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 26-year-old woman was sentenced for her role in the robbery of the Citizens Bank in Hutchinson, Minnesota. United States District Court Judge David S. Doty sentenced Erica Lea Reeves, no known residence, to 19 months in federal prison on one count of aiding and abetting bank robbery. Reeves was indicted along with a co-defendant on August 22, 2012. She pleaded guilty on November 7, 2012.
In her plea agreement, Reeves admitted that on July 17, 2012, she and her co-defendant stole $5,770 from Citizens Bank, located at 1390 Highway 15 South, in Hutchinson. According to a law enforcement affidavit filed in the case, Reeves’ co-defendant, Eric Andrew Ebbers, age 25, no known address, presented a bank teller with a note demanding money and warning that he had a gun. After taking the money provided, Ebbers ran to a waiting car driven by Reeves. Police tried to stop the vehicle, but the car sped away. With officers in pursuit, the car exceeded 100 mph, wove through traffic, and avoided a police roadblock. When the car was finally disabled, Reeves was arrested, while Ebbers fled on foot into a cornfield. He was apprehended the following day.
On February 14, 2013, Ebbers was sentenced to 71 months in federal prison on one count of aiding and abetting bank robbery. He pleaded guilty on September 27, 2012. In his plea agreement, Ebbers also admitted robbing the Alliance Bank in Lake City, Minnesota, and the Key Bank in Gresham, Oregon. In both instances, Ebbers presented tellers with a note demanding money and warning that he had a gun.
This case was the result of an investigation by the Federal Bureau of Investigation and the McLeod County Sheriff’s Office. The case was prosecuted by Assistant U.S. Attorney Thomas Calhoun-Lopez.U.K. Resident Extradited on Charges <br /> He Traveled to Ohio to Have Sex with a JuvenileRead the Press Release
Richard Castle, 46, a resident of the United Kingdom, has been extradited to the United States where he faces charges of coercion of a minor, travelling with intent to engage in illicit sexual contact with a minor, and transferring obscene material to minors. The charges are related to a trip he allegedly made to Ohio from his home in order to have sexual relations with a juvenile in June 2011.
Mythili Raman, Acting Assistant Attorney General of the Justice Department’s Criminal Division, Carter M. Stewart, U.S. Attorney for the Southern District of Ohio, and William A. Hayes, Acting Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Ohio and Michigan announced the charges today after Castle appeared before a U.S. Magistrate Judge in Dayton, Ohio, who ordered him held without bond pending trial.
Members of the Metropolitan Police Service’s Extradition Team and International Assistance Unit, housed within New Scotland Yard, arrested Castle at his home in Northampton, England on Jan. 12, 2012 and seized at least one computer.
The three-count indictment alleges that Castle, posing as a male named Richard Joshua Parker, used the internet between March 2009 and June 2011 to coerce a juvenile to engage in illicit sexual activity. He allegedly flew to Dayton in June 2011 to engage in illicit sexual relations with the juvenile and stayed approximately three weeks. The indictment also accuses Castle of transferring obscene materials to a juvenile.
Coercion and enticement of a minor is punishable by at least ten years in prison and up to life. Travel with intent to engage in illicit sexual conduct is punishable by up to 30 years and transfer of obscene material to minors is punishable by up to 10 years.
Raman and Stewart acknowledged the cooperative investigation by the Englewood Police Department, Vandalia Police Department and HSI special agents, as well as the invaluable support provided by the Miami Valley Regional Computer Forensics Laboratory, and the Ohio Internet Crimes Against Children Task Force, the U.S. Marshals Service, the HSI Attache London Office, and the assistance of the Justice Department’s Office of International Affairs in Castle’s extradition.
Assistant U.S. Attorney Sheila Lafferty with the Southern District of Ohio and Trial Attorney Mi Yung Claire Park with the Department of Justice’s Child Exploitation and Obscenity Section (CEOS) are representing the United States in the case.
An indictment is merely an accusation, and the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Two Plead Guilty to Crack Cocaine Conspiracy ChargesRead the Press Release
David B. Fein, United States Attorney for the District of Connecticut, today announced that two individuals involved in a New Haven drug distribution ring have pleaded guilty in Hartford federal court. RUFUS HUNTER, also known as “Triple Black,” 30, of New Haven, pleaded guilty today to one count of conspiracy to possess with intent to distribute 28 grams or more of cocaine base (“crack cocaine”). WILONDA MATTHEWS-GARY, also known as “Woo,” 32, of West Haven, pleaded guilty to the same charge yesterday.
According to court documents and statements made in court, this matter stems from an investigation conducted by the FBI New Haven Safe Streets Task Force into drug distribution and related gang activity in The Hill neighborhood of New Haven. The investigation, which included the use of court-authorized wiretaps, revealed that members and associates of the Southside Bloods were distributing large quantities of crack cocaine.
HUNTER and MATTHEWS-GARY are scheduled to be sentenced by Chief United States District Judge Alvin W. Thompson in July 2013, at which time each faces a minimum term of imprisonment of five years and a maximum term of imprisonment of 40 years.
This matter has been investigated by the FBI’s New Haven Safe Streets Task Force, including the New Haven, Hamden and Milford Police Departments, and the State of Connecticut Department of Correction. The case is being prosecuted by Assistant United States Attorneys Anthony Kaplan and Gordon Hall.
PUBLIC AFFAIRS CONTACT:
U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
[email protected]Two Pennsylvania Men Enter Pleas of Guilty to Sexual Assault ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
WHEELING, WEST VIRGINIA – Two Washington, Pennsylvania, men entered pleas of guilty on April 15, 2013, in United States District Court in Wheeling before Judge Frederick P. Stamp, Jr. in relation to the kidnapping of a low-functioning Wheeling woman and taking her across state lines to engage in illegal sexual activity for four days in July.
According to U.S. Attorney William J. Ihlenfeld, II, Jose Jesús TAPIA MONTES, age 38, and Elmer Pina PINTO, age 44, of Washington, Pennsylvania, entered pleas of guilty to “Aiding and Abetting in the Transportation of an Individual in Interstate Commerce with Intent to Engage in Illegal Sexual Activity.”
MONTES and PINTO, who are in custody pending sentencing, faces up to 10 years imprisonment and a $250,000 fine.
The F.B.I. was assisted by the Wheeling Police Department and the Harmony House Child Advocacy Center in the investigation. The case was prosecuted by Assistant U.S. Attorney Robert H. McWilliams, Jr.
Two Indicted for Failing to Stop for Coast GuardRead the Press Release
BROWNSVILLE, Texas - A Brownsville federal grand jury has indicted two Mexican fishing boat crewmen for failing to heave to and obstructing boarding, United States Attorney Kenneth Magidson announced today along with Rear Admiral Roy Nash, Commander, Eighth Coast Guard District.
The indictment alleges Jose Alejandro Carrillo and Ismael Lopez-Ortiz failed to stop for the Coast Guard as directed. The indictment was returned April 9, 2013, and both are set to make their initial appearance tomorrow at 8:45 a.m. before U.S. Magistrate Judge Ronald G. Morgan.
“Failing to 'heave to' for an at-sea Coast Guard boarding is a serious offense,” said Nash. “Vessel operators who do not stop and attempt to flee from the Coast Guard put themselves, law enforcement officers and others at great risk. My thanks to our partner agencies for helping ensure that those who violate this law are held responsible for their actions.”
Carrillo, 24, and Lopez-Ortiz, 23, both of Matamoros, Mexico, were arrested by the Coast Guard on March 16, 2013. At that time, they allegedly fled from a Coast Guard vessel that was attempting to detain them for an inspection. Carrillo was the captain of the Mexican fishing boat, while Lopez-Ortiz assisted Carrillo in controlling the boat during the fleeing from the Coast Guard, the indictment alleges.
Both men have been in custody since their arrest.
A conviction for failing to Heave to or obstructing boarding each carries a maximum penalty of five years in federal prison and a possible fine of up to $250,000. Lopez-Ortiz was also indicted on a misdemeanor charge of interfering with a federal agent for which he faces up to a year in prison.
The case was investigated by the Coast Guard Investigative Service. Assistant United States Attorney Joseph Leonard is prosecuting.
An indictment is a formal accusation of criminal conduct, not evidence.
A defendant is presumed innocent unless convicted through due process of law.Topeka Man Sentenced to 30 Years in Federal Prison for Drug TraffickingRead the Press Release
TOPEKA, KAN. – A Topeka man has been sentenced to 30 years in federal prison for trafficking in methamphetamine, U.S. Attorney Barry Grissom said today.
James Justin Woods, 31, Topeka, Kan., was convicted in a jury trial in December 2012 on one count of conspiracy to distribute methamphetamine and one count of distributing methamphetamine.
During trial, prosecutors presented evidence that Woods was part of a drug trafficking organization that operated from December 2010 to June 2011 in the Topeka area. In May 2011, investigators used intercepted telephone calls and other surveillance techniques to monitor Woods as he set up a series of meetings with buyers in which he exchanged drugs for money.
At sentencing, prosecutors noted that Woods had a prior felony conviction in 2004 in Shawnee County District Court for possession with intent to distribute narcotics.
Grissom commended the Topeka Police Department, the Drug Enforcement Administration, Assistant U.S. Attorney Duston Slinkard Assistant U.S. Attorney Jared Maag for their work on the case.
Three FCI Morgantown Inmates Enter Pleas and Are Sentenced in Federal CourtRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
CLARKSBURG, WEST VIRGINIA — Four FCI Morgantown inmates entered pleas of guilty and were sentenced on April 11, 2013, in United States District Court in Clarksburg before Judge Irene M. Keeley.
United States Attorney William J. Ihlenfeld, II, announced that:
TROY LEWIS, age 40, entered a plea of guilty to “Possession of a Prohibited Object” on December 6, 2012, when a correction officer conducted a random search of inmate LEWIS and found a cell phone hidden in his pants pocket. LEWIS was sentenced to 3 months imprisonment to be served concurrently with his current 144-month sentence.
FRANK NAGI, age 39, entered a plea of guilty to “Possession of a Prohibited Object” on January 13, 2013, when a correction officer conducted a random search of inmate LEWIS and found a cell phone hidden in his pants pocket. NAGI was sentenced to 3 months imprisonment to be served concurrently with his current 78-month sentence.
PANAGOITOS SKORDALOS, age 34, entered a plea of guilty to “Possession of a Prohibited Object” on January 7, 2013, when a correction officer found a cell phone hidden in SKORDALOS’ bed. SKORDALOS was sentenced to 3 months imprisonment to be served consecutively with his current 180-month sentence.
These cases were prosecuted by Assistant United States Attorney Brandon S. Flower and investigated by the Special Investigative Services Staff at FCI Morgantown.
Tennessee Man Sentenced to Five Years in Prison for Causing MF Global to Lose $141 Million on Unauthorized Futures TradesRead the Press Release
CHICAGO — A suburban Memphis man was sentenced today to five years in federal prison for causing $141 million in losses to his clearing firm after executing large, unauthorized overnight trades on wheat futures contracts through the Chicago Board of Trade in February 2008. The defendant, EVAN BRENT DOOLEY, an “associated person” in the Memphis office of MF Global, Inc., traded on his own account through the CME Globex electronic trading platform, via MF Global’s OrderXpress order entry system, knowing that he placed trading orders exceeding his ability to pay for potential losses resulting from those trades.
Dooley, 45, of Mt. Pleasant, Tenn., and formerly of Olive Branch, Miss., was also ordered to pay $141,024,294 in restitution to the MF Global, Inc., bankruptcy estate by U.S. District Judge Robert M Dow, Jr., who imposed the sentence in Federal Court in Chicago. Dooley, who pleaded guilty in December 2012 to two counts of violating the Commodity Exchange Act by speculative position limits, was ordered to begin serving his 60-month sentence on June 18.
[Dooley’s] “willful criminal conduct caused a staggering loss to MF Global,” the government argued in a sentencing memo. “The public, and in this case the financial services industry, needs to know that the courts will deter and incapacitate individuals like [the] defendant.”
The sentence was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
According to the indictment returned in April 2010, Dooley was allowed to trade on his own account as well as for clients from September 2006 to February 2008, and he transmitted orders from a home computer. The indictment alleged that Dooley induced MF Global to open a trading account and act as his financial guarantor by providing false information about his financial condition on his account application.
As part of his guilty plea, Dooley admitted that during overnight trading starting on Feb. 26, 2008, he executed a series of large buy and sell orders for approximately 31,964 wheat futures contracts, knowing that he did not have the ability to pay for potential losses. (Each wheat futures contract called for the delivery of 5,000 bushels of wheat.) At the start of the session, Dooley had a negative balance of approximately $3,000 in his MF Global account and intended that the risks associated with his trading activity be borne directly and solely by MF Global. During the trading session, Dooley established a substantial “short” position, and by 6 a.m. on Feb. 27, 2008, he was short 16,174 May 2008 wheat futures contracts. During the same session, Dooley also traded contracts for March, July and December wheat futures, causing his overall position to exceed regulatory limits for both a single month (May 2008) and for all months combined.
On the morning of Feb. 27, 2008, when the price for May 2008 contracts rose rapidly as Dooley attempted to liquidate his short position, Dooley again executed a series of sell orders. By mid-morning, Dooley was short 17,181 contracts for May 2008 wheat futures and the price had gone “limit up” to approximately $13.495 per bushel. After MF Global representatives learned of Dooley’s overnight trading, MF Global deactivated his account and liquidated the remainder of his position. MF Global, as the clearing member on these trades, paid the CBOT’s clearing house the realized loss of $141,021,489, which Dooley was unable to cover, resulting in a loss of approximately $141,024,294 to MF Global, including the initial negative balance in his account.
The government is being represented by Assistant U.S. Attorney Clifford C. Histed. The Commodity Futures Trading Commission assisted with the investigation.
Syracuse Man Sentenced to 57 Months in Prison for Committing Five Bank RoberriesRead the Press Release
ROCHESTER, N.Y.--U.S. Attorney William J. Hochul, Jr. announced today that James Nicholson, 34, who was convicted of bank robbery, was sentenced to 57 months in prison by U.S. District Judge Frank P. Geraci. Judge Geraci also ordered Nicholson to pay restitution in the amount of $94,393, representing the total amount of cash taken during the five robberies.
Nicholson and co-defendant Brandon Rothenburgh robbed the following banks between June 18, 2012 and August 30, 2012:
First Niagara Bank in Gates, New York on June 18, 2012;
Citizens Bank in Gates, New York on July 12, 2012;
First Niagara Bank in Gates, New York (again) on August 7, 2012;
M&T Bank in Rome, New York on July 24, 2012 and
Bank of America in Auburn, New York on August 30, 2012.
Rothenburgh was also convicted of bank robbery and sentenced to 165 months in prison in February 2013.
According to Assistant U.S. Attorney Everardo A. Rodriguez, who handled the case, Nicholson and Rothenburgh wore masks when they entered the banks. One or the other would then vault over the teller counter and demand cash from the tellers before jumping back over the counter and exiting the bank.
"This case involved one of the finest examples of teamwork," said U.S. Attorney Hochul. "In addition to the fine work of multiple federal, state and local agencies, I commend the hard work of the Gates Police Department, under the direction of Chief David DiCaro, for its efforts in bringing this prosecution to a successful conclusion."
The sentencing is the result of a joint investigation by the Gates Police Department, under the direction of Chief David DiCaro, the Federal Bureau of Investigation Rochester Office, under the direction of Acting Special Agent in Charge Richard Frankel, the FBI Syracuse Office, under the direction of Special Agent in Charge Clifford Holly, the New York State Police, under the direction of Major Mark Koss, the Geddes Police Department, under the direction of Victor Gillette, the Auburn Police Department, under the direction of Chief Brian Neagle, the Syracuse Police Department, under the direction of Chief Frank Fowler, the New York State Department of Corrections and Community Supervision, and the Onondaga County Sheriff’s Department, under the direction of Sheriff Kevin Walsh. Also assisting in the investigation was the United States Attorney’s Office for the Northern District of New York, under the direction of U.S. Attorney Richard Hartunian.
Superseding Indictment Issued for Dover Developer ZimmermanRead the Press Release
WILMINGTON, Del. – Charles M. Oberly, III, United States Attorney for the District of Delaware, announced today that the federal grand jury returned a Superseding Indictment charging Michael A. Zimmerman, age 56, of Dover with additional fraud and money-laundering offenses.
The Superseding Indictment alleges that Zimmerman made a false statement in April 2008 in connection with a $685,206.00 construction draw request to The Bancorp Bank (“Bancorp”) for the Long Neck project in Sussex County, Delaware. The Superseding Indictment alleges that two line items within that draw request, totaling $440,206.00, were false and were not for work that was not connected to the Long Neck project. According to the Superseding Indictment, Zimmerman submitted several forged and/or fraudulent documents to Bancorp in connection with the construction draw request. Zimmerman’s conduct in submitting the false draw request comprises Count 10 of the Superseding Indictment, which is punishable by a maximum term of 30 years imprisonment, a fine of $250,000.00, and mandatory restitution.
The Superseding Indictment further alleges that Zimmerman utilized at least a portion of the construction draw request for personal purposes unrelated to the Long Neck project. In particular, Zimmerman caused the transfer of Bancorp loan proceeds from his company account to his personal bank account in the amount of $106,672.00. Zimmerman ultimately used those funds to reimburse himself for a check he had written on or about May 7, 2008, toward his partnership investment in Club Wild Quail, LLC – an entity which owned the Wild Quail Country Club in Camden-Wyoming, Delaware. The diversion of Long Neck project funds to Zimmerman’s personal account constitutes the money laundering count in Count 11 of the Superseding Indictment. This charge carries a maximum term of 10 years imprisonment and a fine of up to $250,000.00.
The case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Office of Inspector General, Board of Governors of the Federal Reserve System and is being prosecuted by Assistant United States Attorneys Robert F. Kravetz and Lesley F. Wolf.
Members of the public are reminded that an Indictment is only an allegation and that a defendant is presumed innocent until proven guilty.
See also: http://www.justice.gov/usao/de/news/2013/01-29.html
Zimmermin First Superseding IndictmentStatement of Attorney General Eric Holder<br /> on the Ongoing Investigation into Explosions in BostonRead the Press Release
The Attorney General released the following statement today on the ongoing investigation into the explosions in Boston:
“I want to express my deepest sympathies to the victims of yesterday’s heinous attack in Boston, to those who suffered injuries, and to those who lost friends and loved ones. All of you will be in my thoughts and prayers.
“As our nation struggles to make sense of this attack, I want to assure the citizens of Boston – and all Americans – that the U.S. Department of Justice, the FBI, and all of our federal, state, and local partners are working tirelessly to determine who was responsible for these unspeakable acts, and to make certain they are held accountable to the fullest extent of the law and by any means available to us. To this end, I have directed that the full resources of the Department be deployed to ensure that this matter is fully investigated. We will continue working closely with the Boston Police Department and the Massachusetts State Police – who have performed superbly – to respond to this tragedy, to maintain a heightened state of security, and to prevent any future attacks from occurring.
“As President Obama stated earlier today, we are treating this event as an act of terror. This morning, I met with the President and my fellow members of his national security team to discuss our continuing response. Although it is not yet clear who executed this attack, whether it was an individual or group, or whether it was carried out with support or involvement from a terrorist organization – either foreign or domestic – we will not rest until the perpetrators are brought to justice. The FBI is spearheading a multi-agency investigation through the Boston Joint Terrorism Task Force. They are devoting extensive personnel and assets to this effort – and have already begun conducting exhaustive interviews, analyzing evidence recovered from the scene, and examining video footage for possible leads. In addition, the ATF is providing bomb technicians, explosives assets, and other substantial investigative support. The DEA and U.S. Marshals Service are providing further assistance. And the Office of Justice Programs will coordinate victim support that the City of Boston and the Commonwealth of Massachusetts may request under the Anti-terrorism Emergency Assistance Program.
“As our active and comprehensive investigation unfolds, these federal assets are coordinating with prosecutors from the U.S. Attorney’s Office for the District of Massachusetts, the Justice Department’s National Security Division, and federal agencies across the government – including members of the Intelligence Community. This matter is still in the early stages, and it’s important that we let the investigation run its full course. I urge members of the public to remain calm, cooperate with law enforcement, and be vigilant. The FBI has set up a tip line – at 1-800-CALL-FBI – for anyone who has information, images, or details relating to yesterday’s explosions along the Boston Marathon route. We are particularly interested in reviewing video footage captured by bystanders with cell phones or personal cameras near either of the blasts. In an investigation of this nature, no detail is too small.
“Finally, I want to recognize and thank all of the brave law enforcement officials, firefighters, National Guardsmen, medical staff, bystanders, and other first responders in Boston yesterday afternoon who heard the explosions, or received reports of casualties, or saw the shattered glass and rising smoke, and rushed to provide assistance to those in need.
“Each of these remarkable women and men placed the safety of others above their own. Their heroic actions undoubtedly saved lives. And their stories of courage and selflessness remind us that – even in our darkest moments – the American people have always displayed an extraordinary capacity for resilience. We will always be strongest when we stand united. And although today our hearts are broken, my colleagues and I are resolved to bring those responsible for this cowardly act to justice. We will be relentless in our pursuit of the individual or group that carried out this attack, while staying true to our most sacred values. And – as our investigation continues, I am confident that our nation will recover, and that we will emerge from this terrible tragedy not only safer, but stronger, than ever before.”
St. Paul Man Sentenced for Role in Large Marijuana Distribution RingRead the Press Release
MINNEAPOLIS—Earlier today in federal court, a 38-year-old St. Paul man was sentenced for his role in a large marijuana distribution ring. United States District Court Judge Patrick J. Schiltz sentenced Cesar Sevilla-Acosta to 135 months in federal prison on one count of conspiracy to distribute marijuana. Sevilla-Acosta and 27 co-defendants were charged on October 18, 2010, in a superseding indictment. He was convicted on November 28, 2012, following a three-day trial. Because the federal judicial system does not have parole, Sevilla-Acosta will spend virtually his entire prison sentence behind bars.
Following today’s sentencing, Dan Moren, Assistant Special Agent in Charge of the U.S. Drug Enforcement Administration’s Minneapolis-St. Paul Field Office, said, “The sentencing of Mr. Sevilla-Acosta brings closure to a significant investigation targeting a Mexican-based criminal organization. The citizens of Minnesota should be proud of the perseverance and determination put forth by the case agents, prosecutors, and law enforcement partners in dismantling this criminal drug organization.”
Trial evidence proved that from 2006 through September 23, 2010, Sevilla-Acosta conspired with others to distribute 1,000 kilograms or more of marijuana throughout Minnesota and Colorado. The drug ring was responsible for the distribution of approximately 25,000 kilograms of marijuana in Minnesota from 2006 to September 2010. The proceeds of those sales totaled millions of dollars.
Judge Schiltz previously sentenced 23 of Sevilla-Acosta’s co-defendants on one count of conspiracy to distribute marijuana:
On June 5, 2012, Sergio Abraham Olivas Padilla, also known as Juan Alonzo-Perez, was sentenced to 60 months in prison on one count of conspiracy to distribute marijuana. He pleaded guilty on September 20, 2011.
On March 5, 2012, Jose Israel Diaz was sentenced to 18 months in prison. He pleaded guilty on May 10, 2011.
On March 2, 2012, Ricardo Diaz was sentenced to 70 months in prison. He pleaded guilty on May 13, 2011.
On December 22, 2011, Stephanie Rachel Raduenz was sentenced to three years of probation. She pleaded guilty on December 20, 2010.
On December 21, 2011, Jorge Luis Medrano was sentenced to 15 months in prison. He pleaded guilty on December 3, 2010.
On December 19, 2011, Jose Cruz Alvarez Jaime, also known as Carlos Munoz-Perez, was sentenced to 75 months in prison and Tyler Louis Kyte was sentenced to 84 months in prison. Jaime pleaded guilty on May 10, 2011, and Kyte pleaded guilty on December 7, 2010.
On December 14, 2011, Michael Asencion Moreno was sentenced to 108 months in prison. He pleaded guilty on January 11, 2011.
On November 29, 2011, Federico Llamas, III, was sentenced to 78 months in prison. He pleaded guilty on December 16, 2010.
On November 1, 2011, Gustavo Moreno was sentenced to 18 months in prison. He pleaded guilty on May 13, 2011.
On October 28, 2011, Jorge Luis Villar-Meras was also sentenced to 18 months in prison. He pleaded guilty on May 4, 2012.
On October 5, 2011, Yolanda Jean Moreno was sentenced to 12 months and 1 day in prison. She pleaded guilty on November 22, 2010.
On September 27, 2011, Francisco Javier Carreon-Garcia was sentenced to 121 months in prison. He pleaded guilty on January 13, 2011.On August 30, 2011, Greg Bryan Ortega was sentenced to 24 months in prison. He pleaded guilty on December 13, 2010.
On August 29, 2011, Sabrina Jean Lafountaine was sentenced to three years of probation and Alan Lee Lorentz was sentenced to six months in prison. Lafountaine and Lorentz pleaded guilty on December 6, 2010.
On August 11, 2011, Alonso Rascon-Olivas was sentenced to 68 months in prison. He pleaded guilty on November 29, 2010.
On August 5, 2011, Joel Auren Zellmann was sentenced to three years of probation. He pleaded guilty on November 12, 2010.
On July 28, 2011, Bruce John Johnson was sentenced to 43 months in prison. He pleaded guilty on November 17, 2010.
On July 26, 2011, Amy Marie Mayberry was sentenced to 12 months in prison. She pleaded guilty on December 20, 2010.
On July 8, 2011, Stefanie Donna Kalenberg was sentenced to 10 months in prison. She also pleaded guilty on December 20, 2010.
On June 30, 2011, Charles Joseph Kalenberg was sentenced also sentenced to 10 months in prison. He pleaded guilty on November 8, 2010.
On June 23, 2011, Alfonso Prado-Galvon was sentenced to 37 months in prison. He pleaded guilty on December 21, 2010.
In addition, Judge Schiltz sentenced Sevilla-Acosta’s four remaining co-defendants on one count of possession with intent to distribute marijuana:
On July 27, 2011, Jose Luis Renterra was sentenced to 37 months in prison on one count of possession with intent to distribute marijuana on September 22, 2010. He pleaded guilty on January 13, 2011.
On June 10, 2011, Rogelio E. Obeso-Melchor was sentenced to 30 months in prison on one count of possession with intent to distribute on April 20, 2010. He pleaded guilty on December 21, 2010.
On May 19, 2011, William Robert Laurie was sentenced to 27 months in prison on one count of possession with intent to distribute on August 19, 2009. He pleaded guilty on November 16, 2010.
On April 29, 2011, Patrick Thomas Maykoski was sentenced to 60 months in prison on one count of possession with intent to distribute on February 24, 2010. Maykoski pleaded guilty on October 29, 2010.This sentencing culminates a significant investigation, dubbed Operation Weed Whacker. This case was the result of an Organized Crime Drug Enforcement Task Force investigation led by the DEA’s Minneapolis—St. Paul District Office, in cooperation with other state and federal law enforcement agencies, including the Bloomington Police Department, the McLeod County Sheriff’s Office, the Sibley County Sheriff’s Office, the Carver County Sheriff’s Office, the Hutchinson Police Department, and the Glencoe Police Department, with assistance provided by the South West Metro Drug Task Force, the DEA’s Denver Office, the Denver Police Department, the Minnesota Bureau of Criminal Apprehension, the Minnesota State Patrol, the Dakota County Drug Task Force, the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, and the U.S. Marshals Service. It was prosecuted by Assistant U.S. Attorney Thomas M. Hollenhorst.
St. Michael Man Pleads Guilty to Burglary of a Post Office and Conspiracy to Commit Bank FraudRead the Press Release
FARGO - U.S. Attorney Timothy Q. Purdon announced that on April 16, 2013, Robert Redroad, Jr. of St. Michael, N.D., pleaded guilty before U.S. District Judge Ralph R. Erickson to charges of burglary of a post office and conspiracy to commit bank fraud.
Redroad, Jr., 41, pleaded guilty to breaking into the Tokio Post Office on the Spirit Lake Indian Reservation and stealing a U.S. Treasury check made payable to another person. Redroad, Jr. forged the signature on the check and had another individual cash it at a Wells Fargo Bank in Moorhead, Minn. The incidents occurred in September of 2012 in the Districts of North Dakota and Minnesota.
The charge of burglary of a post office carries a statutory maximum penalty of five years’ imprisonment and the charge of conspiracy to commit bank fraud carries a statutory maximum penalty of 30 years’ imprisonment.
The case was investigated by the U.S. Postal Inspection Service.
Sentencing for Redroad, Jr. has been scheduled for July 12, 2013, in U.S. District Court in Fargo, N.D., at 10:00.
Assistant U.S. Attorney Janice M. Morley is prosecuting the case.
Sioux Falls Man Indicted for Fraud, Embezzlement, and Money LaunderingRead the Press Release
United States Attorney Brendan V. Johnson announced that a Sioux Falls, South Dakota man has been indicted by a federal grand jury for fraud.
Gerald Lloyd Larson, age 69, was indicted by a federal grand jury on April 2, 2013 for bank fraud, embezzlement in connection with health care, and two counts of money laundering.
Larson appeared before U.S. Magistrate Judge John E. Simko on April 15, 2013 and pled not guilty to the indictment. The charges carry maximum possible sentences as follows: bank fraud – 30 years in prison and/or $1 million fine; embezzlement – 10 years in prison and/or $250,000 fine; and money laundering – 20 years in prison and/or a $500,000 fine on each count. Restitution may also be ordered.
The charges are merely accusations and Larson is presumed innocent until and unless proven guilty.
Larson is accused of embezzling funds from his former employer, a health care provider located in Sioux Falls, by depositing items meant for his employer’s account into his personal bank account.
The investigation is being conducted by the Federal Bureau of Investigation. Assistant U.S. Attorney Connie Larson is prosecuting the case. Larson was released on his own recognizance pending trial.
Seattle and King County, Wash., Agree to Upgrade Combined Stormwater Systems to Protect Local Waters from Raw Sewage OverflowsRead the Press Release
King County, Wash. and the city of Seattle have agreed to invest in major upgrades to local sewage and combined stormwater collection, piping and treatment under settlements with the Department of Justice and the U.S Environmental Protection Agency (EPA). The state of Washington was a co-plaintiff and partner in these settlements.
The agreements are the result of extensive federal and state government cooperation and pave the way for employing more “green infrastructure” projects like green roofs, permeable pavements and urban runoff gardens, which help reduce demands on local sewer and stormwater systems.
“Today’s settlement will substantially reduce overflows of sewage-contaminated stormwater into the Puget Sound and other area waterways and significantly benefit the environment and health of residents of King County and Seattle,” said Ignacia S. Moreno, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “The agreement provides a long-term planning approach to managing the area’s stormwater that integrates green infrastructure and requires improvements to system-wide sewer operations and maintenance.”
“EPA is working with cities and counties to find smart, effective solutions to reduce raw sewage and contaminated stormwater,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlements allow Seattle and King County to use innovative solutions, like green infrastructure, to help dramatically improve local water quality.”
“We’re pleased with the commitments King County and Seattle make in these legal agreements to reduce and control these overflows off Seattle’s shores,” said Maia Bellon, Washington state Director of Ecology. “The Consent Decrees allow flexibility in selecting and coordinating clean water projects, while setting firm dates to finish the job.”
Both agreements allow the city and county to use an integrated planning approach, which encourages communities to set their own clean water project priorities and invest in fixing the most pressing problems first. The settlements also require King County and Seattle to develop and implement a joint plan to improve system-wide operations and maintenance, since Seattle conveys the combined sewage it collects to King County’s system for treatment prior to discharge.KING COUNTY
Under the terms of the county settlement, King County will implement a long-term plan for controlling sewer overflows. By implementing these measures, King County will reduce its raw sewage discharges by approximately 95 to 99 percent, better protecting Puget Sound, Lake Washington and the Duwamish River from sewage-laced overflows. The improvements and upgrades are expected to cost approximately $860 million. In addition, King County will pay a civil penalty of $400,000.
The agreement allows the county to substitute green infrastructure projects, like green roofs, permeable pavements and urban gardens, which help reduce the demands on local sewer and stormwater systems, at four of its sewer overflow control projects.
Between 2006 and 2010, King County discharged approximately 900 million gallons of raw sewage to waters of the United States on an annual basis through discharges from its combined sewer system. During this time period, the county also violated the effluent limitations of its discharge permit, including fecal coliform at more than one of its wastewater treatment plants, and allowed wastewater to bypass secondary treatment at one of its wastewater treatment plants in violation of its discharge permit and the Clean Water Act.
CITY OF SEATTLE
Under the settlement with the city of Seattle, the city will develop and implement a long-term plan for better controlling sewer overflows and improve system-wide operations and maintenance. The city will also implement plans to control fats, oils and greases, and reduce debris being discharged by the system. In addition, the settlement provides Seattle with the opportunity to also use an integrated planning approach and to substitute green infrastructure at several of its sewer overflow control projects. By implementing these measures, the city will reduce its raw sewage discharges by approximately 99 percent at an estimated cost of $600 million. Seattle will also pay a civil penalty of $350,000.
Between 2007 and 2010, Seattle discharged approximately 200 million gallons of raw sewage into area waterways on an annual basis. During this time period, the city also improperly operated and maintained its sanitary sewer system, resulting in unauthorized discharges of raw sewage to public and private properties, including basement backups.
Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of the EPA’s top priorities. Reductions in sewer and stormwater overflows are accomplished by obtaining cities’ commitments to implement timely, affordable solutions to these problems, which may also include the use of Integrated Municipal Stormwater and Wastewater Plans. This approach can also lead to more sustainable and comprehensive solutions, such as green infrastructure, that improve water quality and enhance community vitality.The settlement, lodged today in the U.S. District Court for the Western District of Washington, is subject to a 30-day public comment period and approval by the federal court. The consent decree can be viewed on the Justice Department website: http://www.justice.gov/enrd/Consent_Decrees.html
More information about the settlement: www.epa.gov/enforcement/water/cases/washington.html
More information about EPA’s national enforcement initiative: http://www.epa.gov/compliance/data/planning/initiatives/2011sewagestormwater.html
More information about Integrated Municipal Stormwater and Wastewater Plans: http://cfpub.epa.gov/npdes/integratedplans.cfm
San Fernando Valley Doctor Who Pleaded Guilty in $3 Million Medicare Fraud Case Sentenced to 3½ Years in Federal PrisonRead the Press Release
LOS ANGELES – A medical doctor who owns a cosmetic medicine clinic in the Winnetka district of the San Fernando Valley has been sentenced to 42 months in federal prison for bilking Medicare out of more than $3 million by submitting bills for procedures he never performed.
Pezhman Ebrahimzadeh, who uses the name “Pez Abrahams,” 50, of Calabasas, received the 3½-year sentence yesterday from United States District Judge George H. Wu.
In addition to the prison term, Judge Wu ordered Ebrahimzadeh to pay $3,184,000 in restitution, most of which is to be paid to the Medicare program.
Ebrahimzadeh owns the Winnetka Medical Group, a cosmetic health care clinic that operates under the name Health & Beauty Clinic. At his clinic, Ebrahimzadeh provides cosmetic treatments that involve radiofrequency lasers and liposuction. As some of his patients were Medicare beneficiaries, Ebrahimzadeh obtained their beneficiary information, which was used to bill Medicare for procedures he did not perform.
Ebrahimzadeh also obtained beneficiary information for patients he never met or treated, and he used that information to submit other fraudulent bills to Medicare.
In relation to the bogus bills submitted to Medicare, Ebrahimzadeh typically claimed he had performed three expensive procedures: revascularization, ablation of a bone tumor, or the placement of a radiotherapy catheter in a breast. Ebrahimzadeh made these claims, even though he lacked the equipment needed to perform revascularizations or the placement of radiotherapy catheters.
Ebrahimzadeh’s “conduct was so brazen that he billed Medicare for purportedly performing dozens of procedures on patients who were dead,” prosecutors wrote in a sentencing memorandum to the court. “For one such patient, defendant billed Medicare for seven separate high-paying procedures. [Ebrahimzadeh] also altered medical records in an attempt to conceal his fraudulent conduct. In addition to defrauding Medicare, defendant billed private insurance carriers for similar procedures, some of which he claimed he performed on himself.”
Between September 2008 and April 2012, Ebrahimzadeh submitted $7.5 million in bogus claims, and Medicare paid just over $3 million.
Ebrahimzadeh pleaded guilty in January to one count of health care fraud.
In the sentencing memo, prosecutors noted that Ebrahimzadeh was arrested last month on suspicion of sexually assaulting a patient during a physical examination.
The case against Ebrahimzadeh was investigated by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; and the California Department of Justice, Bureau of Medi-Cal Fraud & Elder Abuse.
Release No. 13-052
San Bernardino County Physician’s Assistant Sentenced to 14 Years in Federal Prison for Illegally Distributing OxyContinRead the Press Release
RIVERSIDE, California – A physician’s assistant who operated a mobile health clinic based in Hesperia was sentenced today to 14 years in federal prison for distributing the powerful and widely abused prescription narcotic OxyContin.
Christopher Henry Lister, 51, of Victorville, was sentenced by United States District Judge Virginia A. Phillips. Lister pleaded guilty last November to one count of conspiracy to distribute and attempt to distribute oxycodone, which is the generic drug that is in the brand name OxyContin.
In a plea agreement filed with the court, Lister admitted that he used his powers as a physician’s assistant to supply OxyContin prescriptions to others, including an undercover operative with the Drug Enforcement Administration. Lister sold prescriptions for OxyContin to co-conspirators knowing that they would in turn sell the popular drug to street-level users.
In one exchange captured on videotape during the DEA investigation, Lister told one of his customers to “stockpile” his supply of OxyContin because Lister was considering getting out of the business. Lister advised the co-conspirator that OxyContin prices on the street would likely increase if he stopped writing prescriptions.
Lister “entered into an ongoing scheme to provide oxycodone, a dangerous opiate, to street-level dealers,” federal prosecutors wrote in a sentencing memo filed with the court. “Using his license as a physician’s assistant, he not only provided these dealers with an avenue to obtain the controlled substance, his use of his prescription-writing powers lent an air of legitimacy to the actions that could have frustrated law enforcement attempts to combat the abuse of a drug closely aligned with heroin abuse.”
Prosecutors noted in court that Lister was previously convicted in a case related to another abuse of public trust. In a case filed in 2003 by the United States Attorney’s Office for the Eastern District of California stemming from an investigation into Medi-Cal fraud, Lister was ultimately convicted of making false statements to a government agent. In court documents, prosecutors said that the case related to Lister “illegally billing Medi-Cal for human growth hormone prescriptions written for non-Medi-Cal recipients [and Lister] himself filled those prescriptions and then sold the drug to users in Los Angeles.”
The OxyContin distribution case against Lister was investigated by the Drug Enforcement Administration.
Release No. 13-051
Sacred Heart Hospital Owner, Executive and Four Doctors Arrested in Alleged Medicare Referral Kickback ConspiracyRead the Press Release
CHICAGO – The owner and another senior executive of Sacred Heart Hospital and four physicians affiliated with the west side facility were arrested today for allegedly conspiring to pay and receive illegal kickbacks, including more than $225,000 in cash, along with other forms of payment, in exchange for the referral of patients insured by Medicare and Medicaid to the hospital.
Agents from the FBI and the U.S. Department of Health and Human Services Office of Inspector General today also began executing search and seizure warrants in connection with an ongoing investigation of alleged Medicare and Medicaid fraud schemes at the hospital involving emergency room evaluation, testing and observation services that were not medically necessary, as well as medically unnecessary sedation, intubation and tracheotomy procedures performed on patients. Approximately $2 million in Medicare reimbursement payments was seized today from various bank accounts.
Arrested were EDWARD J. NOVAK, 58, of Park Ridge, Sacred Heart’s owner and chief executive officer since the late 1990s; ROY M. PAYAWAL, 64, of Burr Ridge, executive vice president and chief financial officer since the early 2000s; and Drs. VENKATESWARA R. “V.R.” KUCHIPUDI, 66, of Oak Brook, PERCY CONRAD MAY, JR., 75, of Chicago, SUBIR MAITRA, 73, of Chicago, and SHANIN MOSHIRI, 57, of Chicago.
Sacred Heart Hospital is a 119-bed acute care facility located at 3240 West Franklin Blvd., in Chicago. Approximately 40 in-patients were in the hospital this morning, and representatives of the HHS Centers for Medicare and Medicaid Services (CMS) were on site and coordinating with the Illinois Department of Healthcare and Family Services to ensure continuity of patient care.
“These charges and the affidavit’s other allegations outline a kickback conspiracy to bribe doctors to refer patients to Sacred Heart where they would be treated in in an environment in which the quality of care and appropriate medical analysis were less important than maximizing the numbers of patients funneled into the hospital,” said Gary S. Shapiro, United States Attorney for the Northern District of Illinois.
“The payment of kickbacks or bribes in exchange for the referral of Medicare or Medicaid patients, regardless of the form in which they are paid, is a crime,” said Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of HHS-OIG. “The Office of Inspector General will continue to work closely with our law enforcement partners to aggressively investigate alleged illegal patient referral schemes and hold accountable those who seek to exploit vulnerable patients and the Medicare and Medicaid programs.”
“Today’s arrests demonstrate our commitment to enforcing the laws intended to prevent abuses of the Medicare and Medicaid programs and to preserve the ability of those programs to provide appropriate medical services to the elderly and the needy,” said Cory B. Nelson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of investigation.
The defendants were charged in a complaint that was filed yesterday and unsealed today after the arrests. All six defendants were scheduled to appear beginning at 3 p.m. before U.S. Magistrate Judge Daniel Martin in Federal Court.
Kickback Conspiracy
A 90-page affidavit in support of the criminal complaint and search and seizure warrants states that former Sacred Heart Physician A began cooperating in the investigation in October 2011, and Administrator A and Administrator B began assisting in January 2013 and February 2012, respectively. Each of them made consensual recordings of meetings and telephone conversations with other executives, administrators, physicians and employees that are described in the affidavit.
According to the complaint – at Novak’s direction and with his approval and Payawal’s assistance – Sacred Heart implemented a scheme to pay kickbacks to physicians in return or referrals of Medicare and Medicaid patients. Novak and Payawal allegedly tried to conceal the scheme by masking payments as fictitious rental payments; paying the salaries of physicians’ employees; providing physicians ghost contracts for duties without any real responsibilities; creating alternative billing arrangements; and purporting to pay physicians to supervise and teach non-existent medical students.
In a conversation that Administrator A recorded on Feb. 28, 2013, Novak and Payawal allegedly identified Drs. Moshiri, Maitra and May as physicians receiving regular kickback payments who Administrator A should pay.
Between January 2010 and February 2013, May allegedly received $74,000 in the form of 37 checks, for $2,000 each, disguised as “rental payments”; Moshiri, a podiatrist, allegedly received $86,000 in 38 checks pursuant to a purported contract to teach podiatry students; and Maitra allegedly received $68,000 in 34 checks pursuant to a purported teaching contract – and the $228,000 total in alleged kickbacks were all in exchange for their referral of patients to Sacred Heart, the charges allege.
In a recorded conversation last month, Maitra allegedly explained to Administrator A that he used to make Novak “so much money” performing almost daily penile implant procedures on patients, but that he no longer performed as many of those procedures because Medicare had decreased its rates of reimbursement for the procedure. Maitra did not comment on whether the patient need for the procedure had somehow changed, according to the affidavit.
Regarding Dr. Kuchipudi, Administrator A told agents that he was one of Sacred Heart’s most prolific patient referral sources and, according to Physician A, was known within the hospital as the “king of nursing homes.” According to Administrator A, Sacred Heart paid Kuchipudi for Medicare patient referrals in two ways: first, by paying most of the salaries of a physician’s assistant and a registered nurse who were effectively employed by Kuchipudi, and second, by paying Physician B for treating Kuchipudi’s patients at Sacred Heart, despite the fact that Kuchipudi, and not the hospital, billed insurers for the services Physician B provided to those patients. These arrangements allegedly benefited Kuchipudi as a result of the hospital absorbing employee salary costs that Kuchipudi would normally have to pay himself.
Emergency Room Admissions
Although not charged, the affidavit supporting the search warrant states that the investigation extends to allegations of unnecessary emergency room admissions. Administrator A told agents that Novak ignored numerous complaints that physicians admit patients who do not require hospitalization, and that certain physicians have subjected patients to unnecessary medial testing and procedures in an attempt to justify the patients’ admissions and to increase billing.
Insiders have told agents that Sacred Heart’s executives established a system to admit nursing home patients, irrespective of any medical necessity, by directing referring physicians to use ambulance companies with which Sacred Heart has had “a relationship.” By designating such patients as “direct admission,” Sacred Heart physicians are able to transfer their patients by ambulance from nursing homes, regardless of the proximity to the hospital. Instead of directly admitting these nursing home patients, however, Sacred Heart processes them through its emergency room, billing Medicare for emergency care, which is usually not medically necessary, according to Administrator A. Physician A told investigators that, in his experience, half of the patients presented to Sacred Heart’s ER already had a relationship with one of the hospital’s attending physicians and that the majority of those patients were admitted to the hospital from the emergency room.
Tracheotomy Procedures
The investigation is also probing claims that Sacred Heart Physician D, a pulmonologist, allegedly performs a high number of unnecessary intubations and prolongs them by directing heavy sedation of his patients, often resulting in tracheotomies being performed by Sacred Heart surgeons that may not have been medically necessary. Administrator A told agents that during a lunch with Novak and Payawal in December 2012, they both explained that tracheotomy cases provide substantial insurance reimbursement income for the hospital. On March 1, 2013, Administrator A recorded Novak stating that tracheotomies are Sacred Heart’s “biggest money maker” and the hospital can make $160,000 for a tracheotomy if the patient stays 27 days. On March 7, 2013, the Intensive Care Unit case manager told Administrator A that she must often “stretch” a tracheotomy patient’s stay to 28 days to maximize Medicare reimbursements “to make Novak happy.”
According to the affidavit, Sacred Heart allegedly conceals $7,000 monthly payments for respiratory patient referrals by paying that amount to a healthcare management company that has an employee who works at one of the nursing homes where Kuchipudi sees patients. The consulting firm employee works with Kuchipudi, nursing homes, and Sacred Heart to facilitate the admission of respiratory patients to Sacred Heart, Administrator A told investigators.
On March 4, 2013, investigators from CMS and the State of Illinois arrived at Sacred Heart to conduct an investigation of the hospital’s intubations and tracheotomies, and quality assurance and performance improvement protocols. On March 6, Administrator A recorded Physician D acknowledging that Sacred Heart lacked policies for various aspects of intubations and tracheotomies and that he had given some practice guidelines and procedures obtained from other hospitals to the surveyors in response to their request for Sacred Heart’s policies. At the same time, the ICU nurse manager told Administrator A that she had reviewed eight tracheotomy patient files in connection with the CMS investigation. Physician D was the pulmonologist for all the patients and had performed all but one of the tracheotomies. The nurse manager said that there was no documentation in the patient files explaining the decision to intubate the patients or any efforts to wean them from the ventilators. The following day Administrator A reported the findings to Novak and others and regarding the lack of documentation, and Novak replied with an expletive, according to the affidavit.
On April 8, Physician D told Administrator A in a recorded conversation that Novak had asked him to provide two more tracheotomy cases for the hospital soon before the CMS surveyors might return.
Novak’s Business Interests
According to the affidavit, Novak has direct or indirect ownership interest in various related entities, including Superior Home Health, LLC, a home healthcare company; the Golden L.I.G.H.T. clinics, which are family practice / internal medicine clinics operated as divisions as Sacred Heart; the Chen Medical center; the Garfield Kidney Center, LLC, an outpatient dialysis center; and the Bentley Insurance Group, a medical malpractice insurance company. Novak also owns various real estate and corporate management holding companies, and prior to June 2012, he operated the Chicago R.E.A.C.H Foundation, a purported non-profit, senior citizen program financed by the State of Illinois.
In a series of recorded conversations over the last two months, Payawal told Administrator A that a substantial part of Sacred Heart’s revenue comes from Medicare and Medicaid reimbursements, and explained various ways in which revenue generated from the hospital is transferred to and among Novak’s other corporate interests.
Conspiracy to violate the federal anti-kickback statute carries a maximum penalty of five years in prison and a $250,000 fine and restitution is mandatory. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The government is being represented by Assistant U.S. Attorneys Joel Hammerman, Terra Reynolds and Ryan Hedges.
The public is reminded that a complaint is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The case falls under the umbrella of the Medicare Fraud Strike Force, which expanded operations to Chicago in February 2011, and is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Justice Department and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. More than five dozen defendants have been charged in health care fraud cases since the strike force began operating in Chicago.
To report health care fraud to learn more about the Health Care Fraud Prevention & Enforcement Action Team (HEAT), go to: stopmedicarefraud.gov.
Complaint
Richard P. Molenaar Charged with Conspiracy to Commit BriberyRead the Press Release
RICHARD P. MOLENAAR, III, 47, a resident of Las Cruces, New Mexico, was charged today in a one-count bill of information with conspiracy to commit bribery, announced U.S. Attorney Dana J. Boente.
According to court records, MOLENAAR was the owner of several maintenance/ construction companies, including Ricky’s A/C, Inc., Landmark Mechanical Contractors, LLC, and Custom Carpentry Renovations, LLC. From in or around 2008 through in or around 2011, MOLENAAR used these companies to bid on maintenance jobs at the Orleans Parish Sheriff’s Office (“OPSO”). MOLENAAR’s primary point of contact at the OPSO was its former Director of Purchasing, John Sens. According to the bill of information, MOLENAAR, among others, including Sens, engaged in a rigged bidding process for various OPSO maintenance jobs. In particular, from 2007 through 2011, MOLENAAR, among others, would submit bids for OPSO work in the names of his respective companies but, with the knowledge and participation of, among others, Sens, he would also submit phony or fake bids for these same projects in the names of other local companies, in an effort to give the appearance of a competitive bidding process. In many cases, the phony bids would intentionally be higher than the bids from MOLENAAR and, consequently, Sens would award the work to MOLENAAR.
In exchange for this rigged bidding process, according to court documents, MOLENAAR provided Sens with various things of value. For example, from 2007 through 2011, MOLENAAR provided approximately $30,000 in cash to Sens, as well as the digging and installation of a pool at a residence owned by Sens, at no cost to him.
If convicted, MOLENAAR faces a maximum penalty of 5 years imprisonment, 3 years supervised release, a $250,000 fine, and a $100 special assessment.
U.S. Attorney Boente reiterated that a Bill of Information is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.
The case is being investigated by special agents of the Federal Bureau of Investigation.
The case is being prosecuted by Assistant U. S. Attorneys Matt Chester and Jon Maestri.(Download Indictment )
Quality Roofing, INC., Order to Pay $75,000 Fine, RestitutionRead the Press Release
ROCHESTER, N.Y.-- U.S. Attorney William J. Hochul, Jr., announced today that Quality Roofing, Inc., a Michigan-based corporation convicted of submitting false forms to the government, was sentenced to pay of fine of $75,000, plus restitution of $19,197.50 by U.S. District Judge Charles J. Siragusa.
Assistant U.S. Attorney John J. Field, who handled the case, stated that the defendant was a subcontractor on a government roofing project at the Kenneth B. Keating Federal Building in 2007-2008. The corporation was required to pay its employees the prevailing wage, as established by the Secretary of Labor, and to submit weekly certified payrolls confirming this fact. The defendant did not pay its employees the prevailing wage, but falsely claimed in its certified payrolls that it had done so.
The sentencing is the culmination of an investigation on the part of Special Agents of the General Services Administration, under the direction of James E. Adams, and the Department of Labor, under the direction of Special Agent in Charge Robert L. Panella.Possession of Child Porn Lands Alice Man in Federal PrisonRead the Press Release
HOUSTON – Anthony Rene Perez, 26, of Alice, has been handed a nearly seven-year federal term of imprisonment following his conviction of possession of child pornography, United States Attorney Kenneth Magidson announced today. Indicted in November 2012, Perez pleaded guilty just a short time later – on Jan. 7, 2013.
Today, Senior U.S. District Judge Hayden Head sentenced Perez to a total of 70 months in federal prison to be followed by 10 years of supervised release.
Perez came to the attention of law enforcement following outcries of sexual abuse by two minor children who had been temporarily in his care. The outcries occurred in May 2012. The children described numerous acts of sexual abuse committed against them by Perez while staying at his home during Spring Break 2011. One of the children stated that Perez had photographed the child while showering naked and then later showed the pornographic images of the same child on Perez’ computer.
The investigation led to a search of his former home in Alice in June 2012, at which time several electronic storage devices were discovered and found to contain either child pornography or evidence of its prior existence on the devices. More than 100 images and videos of child pornography were identified, but investigators found no evidence of the alleged sexual abuse described by the children on any of the electronic media.
The FBI, Corpus Christi Police Department’s Internet Crimes Against Children Task Force (ICAC), Alice Police Department, Jim Wells County Sheriff’s Office, and the Texas Rangers investigated the case.
This case, prosecuted by Assistant United States Attorney Lance Duke, was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources."
Portland Man Defrauds Investors Out of $6.4 MillionRead the Press Release
PORTLAND, Ore. – Yusaf Jawed, 44, Portland, Oregon, entered a guilty plea in federal court to five counts of mail fraud and 12 counts of wire fraud in connection with an investment fraud scheme he orchestrated in Oregon, Washington, California, and other states. Sentencing has been scheduled for June 21, 2013 at 10:30 a.m.
The 17-count information alleges that from February 2008 through September 2009, Jawed raised approximately $6.4 million from investors in a hedge fund he controlled called the Alpha Qualified Fund. Contrary to representations by Jawed, very little of the money was actually invested and most of the funds were diverted to unrelated purposes such as payment of finders’ fees and commissions, repayment of loans, payment of office expenses, and payment to prior investors.
Each count of mail and wire fraud carries with it a maximum sentence of 20 years, a fine of $250,000 and five years of supervised release. As part of Jawed’s plea agreement, both parties will recommend a period of 78 months in prison. In addition, Jawed agreed to $6.4 million in forfeiture, to the extent assets exist, and to make restitution to investors as ordered by the court.
The case was investigated by the Federal Bureau of Investigation, with the assistance of the Securities and Exchange Commission, which also filed a civil lawsuit against Jawed and others associated with him. The case was prosecuted by Senior Litigation Counsel and Assistant U. S. Attorney Allan M. Garten.
Ponzi Scheme IndictedRead the Press Release
Michael J. Moore, United States Attorney for the Middle District of Georgia, announces that GREGORY L. CRABTREE of Proctorville, Ohio, and JAMES M. DONNAN, III, of Athens, Georgia, have been charged in an eighty-five count indictment returned against them last week and unsealed today. The indictment charges the two men with operating an alleged pyramid or “Ponzi” scheme between 2008 and 2010 in the Middle District of Georgia and elsewhere.CRABTREE and DONNAN are scheduled to appear at 3:30 p.m. today before United States Magistrate Judge Charles Weigle for an initial appearance as to these charges.
Count one of the indictment charges conspiracy to commit wire and mail fraud in violation of United States Code Title 18, Sections 1349, 1341 and 1343. It carries a maximum sentence of twenty years imprisonment and a $250,000 fine upon conviction, to be followed by three years of supervised release.
Counts two through thirteen charge mail fraud in violation of Title 18, United States Code, Sections 1341 and 2 . Counts fourteen through thirty-six charge wire fraud in violation of Title 18, United States Code, Sections 1343 and 2. Each count of mail or wire fraud carries a maximum sentence of twenty years imprisonment and a fine of $250,000, together with three years of supervised release per count.
Counts thirty-seven through fifty-one each charge the unlawful transportation of interstate securities and carry a maximum sentence of five years imprisonment, a maximum fine of $250,000, and a term of supervised release of three years per count.
Count fifty-two charges conspiracy to launder the proceeds of unlawful activity in violation of Title 18, United States Code, Section 1956 (h) and carries a maximum sentence of up to twenty years imprisonment and a maximum fine of up to $500,000 or twice the value of the funds or financial instruments involved in the offense, whichever is greater, to be followed with up to three years of supervised release.
Counts fifty-three through seventy charge conducting financial transactions with unlawful proceeds of mail and wire fraud (money laundering) to promote the commission of that fraudulent activity in violation of Title 18, United States Code, Sections 1956(a)(1)(A)(I) and 2. These counts each carry a maximum term of imprisonment of twenty years, a maximum fine of $500,000 or twice the value of the funds or financial instruments involved in the offense, whichever is greater, together with up to three years of supervised release.
Counts seventy-one through eighty-five charge engaging in monetary transactions with property criminally derived from wire and mail fraud in violation of Title 18, United States Code, Sections 1957 and 2. Each of these counts carries a maximum term of imprisonment of ten years, a maximum fine of $250,000 or twice the value of the criminally derived property that is the basis of the transaction, whichever is greater, together with up to three years of supervised release.
The indictment also has notice provisions that the United States intends to forfeit various properties and assets of the defendants pursuant to the provisions of Title 18, United States Code, Section 981(a)(1)(C) and Title 28, United States Code, Section 2461(c).
The charges contained in the indictment are merely allegations of criminal activity by the government and the defendants are presumed innocent until and unless proven guilty.
The case was jointly investigated by Agents of the Federal Bureau of Investigation and the United States Internal Revenue Service, Criminal Investigation Division.
Inquiries regarding the case should be directed to Sue McKinney, Public Affairs Specialist, United States Attorney’s Office at (478) 621-2601.
Pittsburgh Man Charged in Johnstown with Trafficking HeroinRead the Press Release
JOHNSTOWN, Pa. - A resident of Pittsburgh, Pa., has been indicted by a federal grand jury in Johnstown on a charge of possession with intent to distribute heroin, United States Attorney David J. Hickton announced today.
The indictment named Warren Charles Green, IV, 27.
According to the indictment presented to the court, on Apr. 5, 2013, Green possessed with the intent to distribute one kilogram or more of heroin.
The law provides for a maximum total sentence of life in prison, a fine of $4,000,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.
The Pennsylvania State Police, Somerset Turnpike Barracks, and the Drug Enforcement Administration conducted the investigation leading to the indictment in this case.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Parker Drilling Company Resolves FCPA Investigation and Agrees to Pay $11.76 Million PenaltyRead the Press Release
Alexandria, Va. – Parker Drilling Company, a publicly listed drilling-services company, headquartered in Houston, has agreed to pay an $11.76 million penalty to resolve charges related to the Foreign Corrupt Practices Act (FCPA) for authorizing payment to an intermediary, knowing that the payment would be used to corruptly influence the decisions of a Nigerian government panel reviewing Parker Drilling’s adherence to Nigerian customs and tax laws. U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and Acting Assistant Attorney General Mythili Raman of the Criminal Division announced the charges.
The investigation of Parker Drilling stemmed from the Justice Department’s Panalpina-related investigations, which previously yielded criminal resolutions with Panalpina and five oil and gas service companies and subsidiaries and resulted in more than $156 million in criminal penalties.
Today, the department filed a deferred prosecution agreement and a criminal information against Parker Drilling in U.S. District Court for the Eastern District of Virginia. The one-count information charges Parker Drilling with violating the FCPA’s anti-bribery provisions.
According to court documents, in 2001 and 2002, Panalpina World Transport (Nigeria) Limited, working on Parker Drilling’s behalf, avoided certain costs associated with complying with Nigeria’s customs laws by fraudulently claiming that Parker Drilling’s rigs had been exported and then re-imported into Nigeria. In late 2002, Nigeria formed a government commission, commonly called the Temporary Import (TI) Panel, to examine whether Nigeria’s Customs Service had collected certain duties and tariffs that Nigeria was due. In December 2002, the TI Panel commenced proceedings against Parker Drilling. The TI Panel later determined that Parker Drilling had violated Nigeria’s customs laws and assessed a $3.8 million fine against Parker Drilling.
According to court documents, rather than pay the assessed fine, Parker Drilling contracted indirectly with an intermediary agent to resolve its customs issues. From January to May 2004, Parker Drilling transferred $1.25 million to the agent, who reported spending a portion of the money on various things including entertaining government officials. Emails in which the agent requested additional money from Parker Drilling referenced the agent’s interactions with Nigeria’s Ministry of Finance, State Security Service, and a delegation from the president’s office. Two senior executives within Parker Drilling at the time reviewed and approved the agent’s invoices, knowing that the invoices arbitrarily attributed portions of the money that Parker Drilling transferred to the agent to various fees and expenses. The agent succeeded in reducing Parker Drilling’s TI Panel fines from $3.8 million to just $750,000.
Under the terms of the agreement, the Justice Department agreed to defer prosecution of Parker Drilling for three years. Parker Drilling agreed, among other things, to implement an enhanced compliance program and internal controls capable of preventing and detecting FCPA violations, to report periodically to the department concerning Parker Drilling’s compliance efforts, and to cooperate with the department in ongoing investigations. If Parker Drilling abides by the terms of the deferred prosecution agreement, the department will dismiss the criminal information when the term of the agreement expires.
In entering into the deferred prosecution agreement with Parker Drilling, the Justice Department took into account a number of considerations. Parker Drilling conducted an extensive, multi-year investigation into the charged conduct; engaged in widespread remediation, including ending its business relationships with officers, employees, or agents primarily responsible for the corrupt payments, enhancing scrutiny of high-risk third-party agents and transactions, increasing training and testing requirements, and instituting heightened review of proposals and other transactional documents for all the company’s contracts; otherwise significantly enhanced its compliance program and internal controls; and agreed to continue to cooperate with the department in any ongoing investigation of the conduct.
Parker Drilling also reached a settlement of a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC) charging Parker Drilling with violating the FCPA’s anti-bribery, books and records, and internal controls provisions. As part of that settlement, Parker Drilling agreed to pay $3.05 million in disgorgement and $1.04 million in prejudgment interest relating to those violations.
The criminal case is being prosecuted by Assistant U.S. Attorney Jasmine Yoon of the U.S. Attorney’s Office for the Eastern District of Virginia and Trial Attorney Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section, and is being investigated by the FBI. The department’s Office of International Affairs assisted in the investigation. The department also acknowledges and is grateful for the assistance of the Crown Prosecution Service, the United Kingdom’s Metropolitan Police Service, and SEC.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.Parker Drilling Company Resolves FCPA Investigation <br /> and Agrees to Pay $11.76 Million PenaltyRead the Press Release
Parker Drilling Company, a publicly listed drilling-services company, headquartered in Houston, has agreed to pay an $11.76 million penalty to resolve charges related to the Foreign Corrupt Practices Act (FCPA) for authorizing payment to an intermediary, knowing that the payment would be used to corruptly influence the decisions of a Nigerian government panel reviewing Parker Drilling’s adherence to Nigerian customs and tax laws. Acting Assistant Attorney General Mythili Raman of the Criminal Division and U.S. Attorney Neil H. MacBride for the Eastern District of Virginia announced the charges.
The investigation of Parker Drilling stemmed from the Justice Department’s Panalpina-related investigations, which previously yielded criminal resolutions with Panalpina and five oil and gas service companies and subsidiaries and resulted in more than $156 million in criminal penalties.
Today, the department filed a deferred prosecution agreement and a criminal information against Parker Drilling in U.S. District Court for the Eastern District of Virginia. The one-count information charges Parker Drilling with violating the FCPA’s anti-bribery provisions.
According to court documents, in 2001 and 2002, Panalpina World Transport (Nigeria) Limited, working on Parker Drilling’s behalf, avoided certain costs associated with complying with Nigeria’s customs laws by fraudulently claiming that Parker Drilling’s rigs had been exported and then re-imported into Nigeria. In late 2002, Nigeria formed a government commission, commonly called the Temporary Import (TI) Panel, to examine whether Nigeria’s Customs Service had collected certain duties and tariffs that Nigeria was due. In December 2002, the TI Panel commenced proceedings against Parker Drilling. The TI Panel later determined that Parker Drilling had violated Nigeria’s customs laws and assessed a $3.8 million fine against Parker Drilling.
According to court documents, rather than pay the assessed fine, Parker Drilling contracted indirectly with an intermediary agent to resolve its customs issues. From January to May 2004, Parker Drilling transferred $1.25 million to the agent, who reported spending a portion of the money on various things including entertaining government officials. Emails in which the agent requested additional money from Parker Drilling referenced the agent’s interactions with Nigeria’s Ministry of Finance, State Security Service, and a delegation from the president’s office. Two senior executives within Parker Drilling at the time reviewed and approved the agent’s invoices, knowing that the invoices arbitrarily attributed portions of the money that Parker Drilling transferred to the agent to various fees and expenses. The agent succeeded in reducing Parker Drilling’s TI Panel fines from $3.8 million to just $750,000.
Under the terms of the agreement, the Justice Department agreed to defer prosecution of Parker Drilling for three years. Parker Drilling agreed, among other things, to implement an enhanced compliance program and internal controls capable of preventing and detecting FCPA violations, to report periodically to the department concerning Parker Drilling’s compliance efforts, and to cooperate with the department in ongoing investigations. If Parker Drilling abides by the terms of the deferred prosecution agreement, the department will dismiss the criminal information when the term of the agreement expires.
In entering into the deferred prosecution agreement with Parker Drilling, the Justice Department took into account a number of considerations. Parker Drilling conducted an extensive, multi-year investigation into the charged conduct; engaged in widespread remediation, including ending its business relationships with officers, employees, or agents primarily responsible for the corrupt payments, enhancing scrutiny of high-risk third-party agents and transactions, increasing training and testing requirements, and instituting heightened review of proposals and other transactional documents for all the company’s contracts; otherwise significantly enhanced its compliance program and internal controls; and agreed to continue to cooperate with the department in any ongoing investigation of the conduct.
Parker Drilling also reached a settlement of a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC) charging Parker Drilling with violating the FCPA’s anti-bribery, books and records, and internal controls provisions. As part of that settlement, Parker Drilling agreed to pay $3.05 million in disgorgement and $1.04 million in prejudgment interest relating to those violations.
The criminal case is being prosecuted by Trial Attorney Stephen J. Spiegelhalter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jasmine Yoon of the U.S. Attorney’s Office for the Eastern District of Virginia, and is being investigated by the FBI. The department’s Office of International Affairs assisted in the investigation. The department also acknowledges and is grateful for the assistance of the Crown Prosecution Service, the United Kingdom’s Metropolitan Police Service, and SEC.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in San Francisco against Mohammed Rezaian, of Novato, Calif. Rezaian is the 30th individual to plead guilty or agree to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, Rezaian conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in San Francisco and San Mateo counties, Calif . Rezaian was also charged with conspiring to use the mail to carry out schemes to fraudulently acquire title to selected properties sold at public auctions, to make and receive payoffs, and to divert to co-conspirators money that would have otherwise gone to mortgage holders and others. According to court documents, a forfeiture allegation was also included in the charges against Rezaian.
The department said Rezaian conspired with others to rig bids and commit mail fraud at public real estate foreclosure auctions in San Francisco and San Mateo counties beginning as early as July 2008 and continuing until about January 2011.
“As a result of this investigation, the Antitrust Division has thus far filed charges against 30 real estate investors in Northern California for their illegal activity at foreclosure auctions,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The division will vigorously pursue the perpetrators of these fraudulent and anticompetitive schemes.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at San Francisco and San Mateo County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.
“Not only is bid rigging at public foreclosure auctions illegal, it also severely undermines the integrity of a fair and competitive marketplace,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI will continue to investigate and pursue those who commit fraudulent anticompetitive practices at foreclosure auctions and work with those who have fallen victim to such selfish crimes.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
The charges today are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif. These investigations are being conducted by the Antitrust Division’s San Francisco office and the FBI’s San Francisco office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco office at 415-436-6660 , visit www.justice.gov/atr/contact/newcase.htm, or call the FBI tip line at 415-553-74 00.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were
subsequently dismissed on the government’s motion.**
Naschitti, N.M., Man Pleads Guilty to Federal Firearm Charge Related to A Shooting at the Gallup Indian Medical CenterRead the Press Release
ALBUQUERQUE – Nathan Madison Coleman, 19, an enrolled member of the Navajo Nation who resides in Naschitti, N.M., pleaded guilty this morning to discharging a firearm during and in relation to a crime of violence under a plea agreement with the U.S. Attorney’s Office. The offense to which Coleman entered his guilty plea requires that Coleman be sentenced to at least ten years in prison.
Coleman was arrested on Jan. 22, 2013 based on a five-count indictment charging him with assault resulting in serious bodily injury; assault with a dangerous weapon; using a firearm during and in relation to a crime of violence; and two counts of possession of a stolen firearm. According to the indictment, on March 12, 2012, Coleman assaulted a man by shooting him with a firearm and caused the victim serious bodily injury. It also alleges that Coleman stole two firearms on Feb. 28, 2012.
During this morning’s proceedings, Coleman pled guilty to Count 3 of the indictment, charging him with using and carrying a firearm in relation to a crime of violence. In entering his guilty plea, Coleman admitted shooting the victim, a 25-year-old Navajo man, in the parking lot of the Gallup Indian Medical Center at 8:00 p.m. on March 12, 2012. Coleman shot the victim because he believed that the victim was disrespectful of his family when they exchanged “words” in the lobby of the Gallup Indian Medical Center. Coleman also admitted using a stolen firearm to shoot the victim.
Coleman has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. Under the terms of the plea agreement, the remaining four counts of the indictment will be dismissed after Coleman is sentenced.
This case was investigated by the Gallup office of the FBI and the Gallup Police Department, and is being prosecuted by Assistant U.S. Attorney Paul H. Spiers.
Multifest Executive Sentenced to Nearly 2 Years in Federal Prison for Income Tax FraudRead the Press Release
Starks failed to report more than half a million dollars of income on her taxes
CHARLESTON, W.Va. –A former Charleston festival executive director who failed to report more than half a million dollars of income on her taxes was sentenced today to 21 months in federal prison on income tax fraud charges, announced U.S. Attorney Booth Goodwin. Deborah S. Starks, 55, of Cross Lanes, W.Va., previously admitted that she filed a false tax return in connection with an embezzlement scheme that drained more than $300,000 from MultiCultural Festival of WV, Inc. (“MultiFest”), a Charleston-based non-profit organization.
U.S. Attorney Booth Goodwin said, "Ms. Starks failed to report more than half a million dollars of income on her taxes. More than $300,000 of that unreported income was money she stole from Multifest.”
Goodwin continued, “Stealing $300,000 from a small business or charity could easily put that organization out of business. That's why my office has focused on investigating and prosecuting cases like these, to protect small businesses and charities and to send a clear message that stealing from them won’t be tolerated."Starks was the treasurer of MultiFest at the time of the scheme. MultiFest sponsors a music, arts and crafts, and dance festival held annually in Charleston. As treasurer, Starks was in charge of revenue and expenses for MultiFest and maintained the organization’s bank accounts.
Starks admitted that beginning in or about 2005 and continuing until 2010, she embezzled approximately $306,000 from MultiFest. She also admitted additional unreported taxable income of approximately $200,000. Starks further admitted that she wrote personal checks to herself and to other people, withdrew cash in the form of checks, and made ATM transactions from MultiFest bank accounts during the scheme. Starks also admitted that the embezzled funds were used primarily to support her personal gambling activities.
In addition to the embezzlement scheme, the defendant admitted that she prepared, signed and filed a joint U.S. Individual Income Tax Return for each of the calendar years 2005, 2006, 2007, 2008, 2009 and 2010 and did not report the embezzled funds as income.
The Court ordered Starks to pay restitution to MultiFest in the amount of $306,872.04 and the Internal Revenue Service (IRS) in the amount of $128,626.
The sentence was imposed by United States District Judge John T. Cophenhaver, Jr.
This matter was investigated by the IRS. Assistant United States Attorney Eumi L. Choi handled the prosecution.
This case was prosecuted as part of the United States Attorney’s Office for the Southern District of West Virginia’s Small Business Protection Initiative. U.S. Attorney Booth Goodwin announced the Small Business Protection Initiative in November 2010. Small Business Protection is a key initiative of the U.S. Attorney’s Office for the Southern District of West Virginia that focuses on the prosecution of individuals who defraud small West Virginia businesses located in the Southern District.
Mt. Carmel Man Sentenced on Child Pornography OffenseRead the Press Release
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today that Donald R. Campbell, 49, of Mt. Carmel, Illinois, was sentenced in Federal Court in Benton on April 11, 2013, to a term of 30 years in prison, to be followed by a lifetime of supervised release after his incarceration, for enticing a minor to engage in sex acts while Campbell videotaped the events.
“Protecting the innocent from predators such as these will always be one of my highest priorities.” said United States Attorney Wigginton. “Such a sentence should serve to not only prevent Campbell from victimizing any more of our children, but to also act as a warning to those who would engage in similar crimes.”
The investigation in this case was conducted by the Federal Bureau of Investigation’s Southern Illinois Cyber Crimes Task Force, and a number of state and local law enforcement agencies.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006, by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
The case was prosecuted by Assistant United States Attorney Thomas E. Leggans.
Moundsville Resident Sentenced on Pill Conspiracy ChargeRead the Press Release
1125 Chapline Street, Federal Building, Suite 3000 ● Wheeling, WV 26003
(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
WHEELING, WEST VIRGINIA - A 34-year old Moundsville, West Virginia, resident was sentenced on April 15, 2012, in United States District Court in Wheeling by Judge Frederick P. Stamp, Jr. for her role in a Florida to West Virginia pill ring.
United States Attorney William J. Ihlenfeld, II, announced that: MILLIE F. ROUPE was sentenced to 46 months imprisonment to be followed by three years of supervised release. ROUPE entered a plea of guilty on November 28, 2012, to “Conspiracy to Distribute Schedule II Controlled Substances” from March of 2012 to September 12, 2012, in Moundsville. ROUPE was remanded to the custody of the United States Marshal pending designation to a Federal institution.
In a joint investigation, involving the Marshall County Sheriff’s Department, the DEA, United State Postal Service, and the West Virginia State Police, beginning in the spring of
2012, agents received information that ROUPE’s apartment in Marshall County was being used to distribute pills being brought to West Virginia from Florida typically via rental vehicles. During the investigation, two traffic stops occurred during which $5,500 in drug proceeds were seized which will be forfeited to the United States as proceeds from the drug activity.This case was prosecuted by Assistant United States Attorney John C. Parr.
Mission Woman Sentenced for Theft in Connection with Healthcare and LarcenyRead the Press Release
United States Attorney Brendan V. Johnson announced that a Mission, South Dakota woman convicted of Theft in Connection with Healthcare and Larceny was sentenced on April 12, 2013 by U.S. Magistrate Judge Mark A. Moreno.
Tisha Leader Charge, age 33, was sentenced to 1 year probation on each count, to be served concurrently, a $100 special assessment to the Victim Assistance Fund and restitution in the amount of $357.93.
Leader Charge was indicted by a federal grand jury on November 14, 2012 and pled guilty to the above charges on February 8, 2013.
The charges stem from incidents wherein Leader Charge, between January 1, 2012 and September 30, 2012, stole the personal property of the employees and interns at Indian Health Hospital in Rosebud. During that time period, Leader Charge was working at the Bureau of Indian Affairs Indian Health Service Hospital as a pharmacy technician. She admitted to stealing money out of co-employees’ belongings in the breakroom. The total amount of money stolen was under $1,000. Leader Charge also fraudulently obtained prescription medications from the pharmacy in various ways. She would “short” prescriptions by taking a few of the prescribed pills out of the bottle before dispensing it to the patients. She also took prescribed medications not picked up by a patient and then entered the medications in the computer system as being restocked. Leader Charge admitted to giving some of the stolen medications to other people.
The investigation was conducted by the Office of the Inspector General. Assistant U.S. Attorney Kathryn N. Rich prosecuted the case.
Milwaukee Man charged with Threatening to Kill United States Probation OfficerRead the Press Release
United States Attorney James L. Santelle announced that earlier today, a federal grand jury returned a one-count indictment charging Ramon Alvarado (Age: 29) a resident of Milwaukee, Wisconsin, with threatening to kill his former supervising United States Probation Officer. If convicted, Alvarado faces a maximum of 10 years in prison.
The indictment alleges, that on March 26, 2013, Alvarado threatened to kill an employee of the United States Probation Office in the Eastern District of Wisconsin, with intent to retaliate against the employee on account of the performance of her official duties in violation of Title 18, United States Code, Section 115(a)(1)(B). Alvarado was originally charged via Criminal Complaint on April 5, 2013. Alvarado, a Latin King gang member, was supervised by the United States Probation Office following completion of his term of imprisonment for a 2008 federal RICO conspiracy conviction.
The case was investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Kelly B. Watzka.
An indictment is merely the formal method of charging an individual and does not constitute evidence of his or her guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Miami Man Sentenced in $1.85 Million Stolen Identity Tax Refund SchemeRead the Press Release
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Jose A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division (IRS-CID), Miami Field Office, Paula Reid, Special Agent in Charge, U.S. Secret Service, Miami Field Office, and Rafael P. Hernandez, Jr., Chief, North Miami Beach Police Department, announced that defendant Frandy Prophete, 34, of Miami, was sentenced today for his participation in a $1.85 million stolen identity tax refund scheme. Specifically, U.S. District Judge William P. Dimitrouleas sentenced Prophete to 61 months in prison, followed by 3 years of supervised release, and restitution in the amount of $1.85 million. Prophete previously pled guilty to one count of conspiracy to file false and fraudulent claims and another count of aggravated identity theft.
According to court documents, Prophete was charged in a multi-count indictment together with defendant Frantz Charles and other co-conspirators for participating in an identity theft tax refund scheme involving the use of the identities of over 900 deceased individuals to file fraudulent income tax returns. The tax refunds generated from the filing of these fraudulent returns were, in turn, deposited into bank accounts controlled by the defendants.
Defendant Charles previously pled guilty to one count of conspiracy to file false and fraudulent claims and one count of aggravated identity theft, and was sentenced on April 10, 2013, by Judge Dimitrouleas to 61 months in prison, followed by 3 years of supervised release, and payment of restitution.
Mr. Ferrer commended the investigative efforts of IRS-CID, the U.S. Secret Service, and the North Miami Beach Police Department. The case is being prosecuted by Assistant U.S. Attorney Jose A. Bonau.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Member of Vermilion Parish Drug Trafficking Organization Sentenced to 10 Years in PrisonRead the Press Release
LAFAYETTE, La. – United States Attorney Stephanie A. Finley announced today that Francisco “Pancho” Delgado-Galaviz, 36, of Mexico and a member of a drug trafficking organization based out of Vermilion Parish, was sentenced by U.S. District Judge Elizabeth E. Foote to 10 years in federal prison followed by five years of supervised release for conspiracy to possess with intent to distribute methamphetamine and cocaine.
Delgado-Galaviz, and 11 co-defendants were indicted in June of 2009 on a variety of drug trafficking and firearms charges, along with unlawful use of communication facilities. The Stipulated Factual Basis entered into by both parties at the time of the guilty plea revealed that this drug trafficking organization was responsible for the movement and sale of methamphetamine and cocaine from Mexico into the United States and distribution throughout the Acadiana area. Delgado-Galaviz and his co-conspirators possessed and distributed kilos of methamphetamine and cocaine. The defendant admitted that he, along with another co-conspirator, was a decision maker in the organization. Their source of supply was from Arizona, but they developed a secondary source of supply for this conspiracy in Houston. The defendant’s couriers were often armed with weapons while transporting the illegal substances. Delgado-Galaviz acknowledged that he was specifically responsible for the distribution of approximately 2 kilograms of methamphetamine and approximately 5 kilograms of cocaine. He is the last of 11-co-defendants to be sentenced.
“The arrests and convictions in this case resulted in the elimination of large quantities of methamphetamine and cocaine being distributed from Mexico into the Western District of Louisiana,” Finley said. “The agencies involved in this case worked tirelessly to investigate and remove these dangerous criminals and drugs from our streets. My office, along with our federal, state and local partners, will continue in their efforts to bring drug dealers to justice.”
The Lafayette Drug Enforcement Administration (DEA) Post of Duty, the Vermilion Parish Sheriff’s Office, and the Lafayette Metro Narcotics Task Force investigated the case. United States Attorney Stephanie A. Finley prosecuted the case.Media AdvisoryRead the Press Release
There will be a press conference regarding the sentencing in United States v. Jeffrey Alan Schoon and Roxena Lee Schoon, 12-CR-4070-MWB, at 12:00 p.m., at the United States Attorney’s Office located at the Ho-Chunk Center, 600 4th Street, 6th Floor, Sioux City, Iowa. Assistant United States Attorney Timothy Duax, Forde O. Fairchild, and Sheriffs and County Attorneys for Crawford and Sac Counties, will comment on the case.
Press releases and interview opportunities will be available.
United States Attorney’s Office staff will be available beginning at approximately 11:30 a.m. on April 17, 2013, to escort members of the press with any camera equipment to the conference room after clearing security.
Maryland Resident Re-Sentenced on Firearms ChargeRead the Press Release
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(304) 234-0100 ● Contact: Chris Zumpetta-Parr, Public Affairs SpecialistFollow us on Twitter @NDWVnews
MARTINSBURG, WEST VIRGINIA - A 31-year old Hagerstown, Maryland, resident was resentenced on April 15, 2013, in United States District Court in Martinsburg by Judge Irene M. Keeley.
United States Attorney William J. Ihlenfeld, II, announced that:
ROBERT JOHN SUMMERVILLE, III, was resentenced to 120 months imprisonment to be followed by three years of supervised release. SUMMERVILLE entered a plea of guilty on March 22, 2012, to one count of possession of a firearm on November 7, 2010, in Jefferson County, after having previously been convicted of a crime punishable by imprisonment for a term exceeding one year. SUMMERVILLE was convicted on April 17, 2009, of burglary in Tarrant County, Texas; on February 8, 2005, of assault in the second degree in the Circuit Court of Allegheny County, Maryland; and, on June 15, 2004, of resisting arrest in the Circuit Court of Washington County, Maryland.
On July 5, 2012, SUMMERVILLE was sentenced to 262 months imprisonment, but case was remanded by the Fourth Circuit Court of Appeals for recalculation of SUMMERVILLE’s criminal history as his prior convictions did not make him an Armed Career Criminal.
SUMMERVILLE was remanded to the custody of the United States Marshal pending designation to a Federal institution.
The case was prosecuted by Assistant United States Attorney Paul T. Camilletti and was investigated by the West Virginia State Police, Shepherdstown Police Department the Bureau of Alcohol, Tobacco, Firearms and Explosives.
Maryland Man Pleads Guilty to Traveling into the District of Columbia to Engage in Illicit Sexual Conduct with A MinorRead the Press Release
WASHINGTON – Scott Richard Swirling, 62, of Silver Spring, Md., pled guilty today to traveling interstate to engage in illicit sexual conduct with a minor, announced U.S. Attorney Ronald C. Machen Jr., Valerie Parlave, Assistant Director in Charge of the FBI’s Washington Field Office, and Cathy L. Lanier, Chief of the Metropolitan Police Department (MPD).
Swirling entered the guilty plea in the U.S. District Court for the District of Columbia. The Honorable John D. Bates is to sentence him on July 11, 2013. Swirling faces a maximum sentence of 30 years of imprisonment as well as a fine of up to $250,000.
According to the government's evidence, on Jan. 7, 2013, Swirling contacted a man he believed to be the father of an under-aged girl on a social network site. That man turned out to be an undercover officer with the FBI's Child Exploitation Task Force. Over the next few days, Swirling engaged in graphic online email and instant message conversations with the undercover officer. During these conversations, Swirling arranged with the undercover officer to meet for the purpose of engaging in sexual acts with the child. Swirling traveled from Silver Spring to a pre-arranged meeting place in Washington, D.C., where he was arrested.
This case was brought as part of the Department of Justice's Project Safe Childhood initiative and investigated by the FBI's Child Exploitation Task Force, which includes members of the FBI's Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney's Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
In announcing the guilty plea, U.S. Attorney Machen, Assistant Director Parlave and Chief Lanier praised the work of the MPD Detectives and Special Agents of the FBI Child Exploitation Task Force. They also commended the efforts of Assistant U.S. Attorney Ari Redbord, who is prosecuting the case.
13-137Manhattan U.S. Attorney Charges Swiss Lawyer and Swiss Banker with Conspiring to Hide Millions of Dollars in Swiss Bank AccountsRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, Kathryn Keneally, Assistant Attorney General for the Tax Division, Department of Justice (“DOJ”), and Richard Weber, the Chief of Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the indictment today of EDGAR PALTZER, a partner at a Swiss law firm (the “Swiss Law Firm”) and a registered attorney in the State of New York, and STEFAN BUCK, the head of private banking and a member of the executive committee at a bank headquartered in Switzerland (“Swiss Bank No. 1”). PALTZER and BUCK are each charged with one count of conspiring with U.S. taxpayer-clients and others to hide millions of dollars in offshore accounts from the IRS and to evade U.S. taxes on the income earned in those accounts.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Edgar Paltzer and Stefan Buck used their professional expertise to guide and encourage their U.S. clients to evade our tax laws. This is simply the latest in an increasingly long list of cases this Office has charged against foreign individuals and entities that allegedly conspired to violate U.S. tax laws, many of which have already been convicted.”
Assistant Attorney General for the DOJ’s Tax Division Kathryn Keneally said: “We learn new information every day about the use of foreign bank accounts to facilitate U.S. tax evasion. Those involved need to balance whether trying to hide money is worth the real risk of discovery and criminal prosecution. Time is running out.”
IRS-CI Chief Richard Weber said: “Today’s indictment is the latest action against foreign bankers and professionals who assist taxpayers with concealing from the IRS their offshore bank accounts and income generated in those accounts. International tax evasion is a high priority for IRS and through our investigative efforts, we are gaining access to more and more information on institutions and individuals involved in offshore tax evasion. IRS Criminal Investigation will use all of our enforcement tools to stop this abuse.”
According to the allegations contained in the Indictment filed today in Manhattan federal court:
PALTZER is a U.S.- and Swiss-trained lawyer who began to practice at the Swiss Law Firm in 1998, in the fields of international private client work, wealth transfer planning, successions, trusts and foundations, and eventually became a partner. PALTZER is licensed to practice in New York State.
In 2007, BUCK worked as a client adviser, and later, as the head of private banking at Swiss Bank No. 1, which provides private banking, asset management, and other services to clients around the world. In December 2012, BUCK became a member of Swiss Bank No. 1’s three-person executive committee.
In March 2009, UBS AG (“UBS”), a Swiss bank that provided private banking services to U.S. taxpayers, entered into a deferred prosecution agreement with the Department of Justice and admitted engaging in a conspiracy to defraud the IRS. In February 2012, Wegelin & Co. (“Wegelin”), another Swiss bank that provided similar services, was indicted by a grand jury in the Southern District of New York for its conduct in conspiring with U.S. taxpayers to evade taxes, and ultimately pled guilty. Between March 2009 and February 2012, Swiss Bank No. 1 experienced an increase of approximately 300% in clients who were U.S. taxpayers. Further, as of September 30, 2012, Swiss Bank No. 1 had approximately 2 billion Swiss francs in assets under management (“AUM”), equating to approximately $2.12 billion. Approximately 882.5 million Swiss francs of this AUM, equating to approximately $938 million, or approximately 44 percent of Swiss Bank No. 1’s total AUM, was held on behalf of U.S. taxpayers living in the United States.
PALTZER and BUCK conspired with various U.S. taxpayers and others to ensure that their clients could hide their Swiss bank accounts and the income generated in these accounts from the IRS. The defendants opened and managed undeclared accounts on behalf of U.S. taxpayers at Swiss Bank No. 1 and other Swiss banks. PALTZER and BUCK helped U.S. taxpayers open undeclared accounts at Swiss Bank No. 1 after these U.S. taxpayers had been informed by other Swiss banks that they had to close their undeclared accounts.
BUCK and PALTZER also helped to repatriate funds to the U.S. taxpayers from their undeclared accounts in Switzerland in ways that were designed to ensure that U.S. authorities would not discover these undeclared accounts. For example, PALTZER helped a U.S. taxpayer repatriate assets in the form jewelry in order to avoid detection of an account in Switzerland. BUCK attempted to dissuade a U.S. taxpayer with an undeclared account at Swiss Bank No. 1 from entering the IRS’s voluntary disclosure program. In substance, he told the taxpayer that the account did not need to be disclosed to the IRS because Swiss Bank No. 1 operated only in Switzerland, and the U.S. rules did not apply.
PALTZER, 56, a dual U.S.-Swiss citizen, and BUCK, 32, a Swiss citizen, both reside in Switzerland. Neither defendant has been arrested.
PALTZER and BUCK each face a maximum sentence of five years in prison, a maximum term of three years of supervised release, and a fine of the greatest of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross pecuniary loss to the victims.
Mr. Bharara praised the outstanding efforts of IRS-CI in the investigation, which he noted is ongoing. He also thanked DOJ’s Tax Division for their significant assistance in the investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Daniel W. Levy, Jason H. Cowley, and David B. Massey and are in charge of the prosecution.
The charges and allegations contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
U.S. v. Edgar Paltzer and Stefan Buck Indictment
Manhattan U.S. Attorney Charges 34 Members and Associates of Two Russian-American Organized Crime Enterprises with Operating International Sportsbooks That Laundered More Than $100 MillionRead the Press Release
One of the Enterprises Allegedly Laundered Tens of Millions of Dollars from Russia and the Ukraine through Cyprus Shell Companies and Bank Accounts into the United States
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Raymond W. Kelly, the Police Commissioner of the City of New York (“NYPD”), announced today the unsealing of charges against 34 alleged members and associates of two related Russian-American organized crime enterprises, including a Russian “Vor,” for a range of offenses including the operation of at least two international bookmaking organizations – or “sportsbooks” – that catered to multi-millionaires and billionaires in the U.S., Russia, and the Ukraine. One enterprise, the Taiwanchik-Trincher Organization, run by VADIM TRINCHER, is alleged to have laundered tens of millions of dollars from Russia and the Ukraine through Cyprus and into the U.S. The other enterprise, the Nahmad-Trincher Organization, run by ILLYA TRINCHER, the son of VADIM TRINCHER, is alleged to have been financed by, among other entities, a prestigious art gallery in New York City.
In connection with the Indictment unsealed today in the Southern District of New York, 29 defendants have been arrested in New York, Philadelphia, Detroit, and Los Angeles. The 20 defendants taken into custody today in New York were presented and arraigned in Manhattan federal court before U.S. Magistrate Judge James C. Francis, IV this afternoon. The remaining defendants arrested today will be presented in federal court in Philadelphia, Detroit, and Los Angeles this afternoon. An additional defendant, HILLEL NAHMAD, is expected to surrender in Los Angeles later today. The remaining four defendants – DONALD McCALMONT, BRYAN ZURIFF, WILLIAM EDLER, and ALIMZHAN TOKHTAKHOUNOV – are fugitives and are still being sought.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, these criminal enterprises were vast and many-tentacled, with one of them reaching across the Atlantic to launder tens of millions of dollars from Russia to the U.S. via Cyprus and in some cases, back again. International money laundering is a serious offense, and we will do everything within our power to inhibit those who seek to sanitize the proceeds of crime through legitimate investment vehicles in this country from doing so.”
FBI Assistant Director-in-Charge George Venizelos said: “Today’s charges demonstrate the scope and reach of Russian organized crime. One of the principal defendants is a notorious Russian ‘thief-in-law’ allegedly directing an international conspiracy through Cyprus to the U.S. The defendants are alleged to have handled untold millions in illegal wagers placed by millionaires and billionaires, laundered millions, and in some cases are themselves multimillionaires. Crime pays only until you are arrested and prosecuted.”
IRS-CI Special Agent-in-Charge Toni Weirauch said: “International money laundering is not a victimless crime. Rather, it is a national and global threat that can provide criminal enterprises with resources to conduct further illegal activity. The laundering of illegal gambling proceeds, in particular, facilitates the underground, untaxed economy which, in turn, harms our nation’s economic strength.”
NYPD Commissioner Raymond W. Kelly said: “The subjects in this case ran high-stakes illegal poker games and online gambling, proceeds from which are alleged to have been funneled to organized crime overseas. The one thing they didn't bet on was the New York City police and federal investigators’ attention. I commend the NYPD Organized Crime Investigations Division and their partners in the FBI and U.S. Attorney Bharara's office for identifying and bringing the members of this organization to justice.”
According to the allegations in the Indictment unsealed today in Manhattan federal court and other court documents:
The Taiwanchik-Trincher Organization
The Taiwanchik-Trincher Organization is a nationwide criminal enterprise with strong ties to Russia and Ukraine. The leadership of the organization ran an international sportsbook that catered primarily to Russian oligarchs living in Russia and Ukraine and throughout the world. The Taiwanchik-Trincher Organization laundered tens of millions of dollars in proceeds from the gambling operation from Russia and the Ukraine through shell companies and bank accounts in Cyprus, and from Cyprus into the U.S. Once the money arrived in the U.S, it was either laundered through additional shell companies or invested in seemingly legitimate investments, such as hedge funds or real estate.
The Taiwanchik-Trincher Organization operated under the protection of ALIMZHAN TOKHTAKHOUNOV, who is known as a “Vor,” a term translated as “Thief-in-Law,” that refers to a member of a select group of high-level criminals from the former Soviet Union. TOKHTAKHOUNOV used his status as a Vor to resolve disputes with clients of the high-stakes illegal gambling operation with implicit and sometimes explicit threats of violence and economic harm. During a single two-month period, TOKHTAKHOUNOV was paid $10 million for his services by the Taiwanchik-Trincher Organization. TOKHTAKHOUNOV is also under indictment in the Southern District of New York for his alleged involvement in bribing officials at the 2002 Winter Olympics held in Salt Lake City, Utah.
Nahmad-Trincher Organization
The Nahmad-Trincher Organization is a nationwide criminal enterprise with leadership in Los Angeles, California, and New York City. The organization ran a high-stakes illegal gambling business that catered primarily to multi-millionaire and billionaire clients. The organization utilized several online gambling websites that operated illegally in the U.S. Debts owed to the Nahmad-Trincher Organization sometimes reached hundreds of thousands of dollars and even millions. One client, who lost approximately two million dollars to the organization, surrendered his plumbing company to the organization as payment of the debt.
The Nahmad-Trincher Organization was financed by, among others, HILLEL NAHMAD, a/k/a “Helly,” and the art gallery he operates in New York City, the Helly Nahmad Gallery. NAMHAD is also charged with conspiring to commit wire fraud in connection with the sale of a painting worth approximately $250,000.
The organization laundered tens of millions of dollars through various companies and bank accounts. It was assisted in its money laundering by RONALD UY, a branch manager at a bank in New York City. UY advised ILLYA TRINCHER on how to structure financial transactions so as to avoid bank reporting requirements.
Illegal Poker Rooms
The Indictment also charges various defendants with promoting and operating high-stakes illegal poker rooms in and around New York City, including EDWIN TING, MOLLY BLOOM, and EUGENE TRINCHER, who is the son of VADIM and brother of ILLYA. The poker games operated by the defendants resulted in gambling debts as high as hundreds of thousands of dollars.
A chart containing the ages, residency information, and charges against the defendants, as well as the maximum penalties they face is attached.
Mr. Bharara thanked the FBI, specifically the Eurasian Organized Crime Squad of the New York Office, IRS-CI, and the NYPD for their work in the investigation.
The case is being prosecuted by the Office’s Organized Crime Unit. Assistant U.S. Attorneys Harris Fischman, Peter Skinner, and Joshua A. Naftalis of the Organized Crime Unit are in charge of the prosecution. Assistant U.S. Attorney Alexander Wilson of the Office’s Asset Forfeiture Unit is responsible for the forfeiture aspects of the case.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Click here to view chart(s)
U.S. v. Alimzhan Tokhtakhounov, et al. Indictment
Lincoln Man Sentenced for Conspiracy to Distribute Methamphetamine, Cocaine, and MarijuanaRead the Press Release
United States Attorney Deborah R. Gilg announced that on April 15, 2013, Luis Orta Espinoza, age 27 of Lincoln, was sentenced to 12 years and seven months (151 months) in prison for his role in a conspiracy to distribute methamphetamine, cocaine, and marijuana between June of 2008 and April of 2012. Following the prison term, Orta Espinoza will serve five years on supervised release.
Orta Espinoza was held responsible for the distribution of at least 1.5 kilograms of methamphetamine mixture (approximately 3 pounds); at least 50 grams of actual methamphetamine (approximately 1 ¾ ounces); at least 2 kilograms of cocaine (approximately 4 ½ pounds); and at least 80 kilograms of marijuana (approximately 176 pounds). Between December of 2011 and April of 2012, an undercover officer made a number of purchases of methamphetamine from a person who was working for Orta Espinoza in the distribution of methamphetamine. In May of 2011, a confidential informant purchased a small amount of cocaine from Orta Espinoza, and in February of 2012, a confidential informant purchased approximately three grams of mostly pure methamphetamine from Orta Espinoza. Other information provided to law enforcement indicated that Orta Espinoza was also involved in the distribution of marijuana.
The matter was investigated by the Lincoln/Lancaster County Narcotics Task Force, which includes officers of the Lincoln Police Department, the Lancaster County Sheriff=s Department, the Federal Bureau of Investigation, (FBI), and the University of Nebraska-Lincoln Police Department.
Lake Andes Man Sentenced for Sexual AbuseRead the Press Release
United States Attorney Brendan V. Johnson announced that a Lake Andes, South Dakota man charged with sexual abuse was sentenced on April 15, 2013 by U.S. District Judge Karen E. Schreier. Ray Flying Hawk, age 43, was sentenced to 48 months in custody.
Flying Hawk was indicted for sexual abuse by a federal grand jury on August 14, 2012, and pled guilty on January 15, 2013.
In April of 2012, Flying Hawk engaged in a sexual act with a person who was incapable of appraising the nature of the conduct and physically incapable of communicating an unwillingness to engage in such act.
This case was investigated by the Bureau of Indian Affairs Law Enforcement Services - Yankton Agency, and the Federal Bureau of Investigation. Assistant U.S. Attorney Thomas J. Wright prosecuted the case.
Flying Hawk was immediately turned over to the custody of the U.S. Marshal.
Lafayette Businessman Sentenced for Tax EvasionRead the Press Release
LAFAYETTE, La. – The day after the annual tax filing deadline United States Attorney Stephanie A. Finley announced that Gary M. Scott, 61, of Lafayette, was sentenced by U.S. District Judge Elizabeth E. Foote on one count of tax evasion to two years in prison, three years of supervised release and ordered to pay $362,961.65 in restitution to the Internal Revenue Service(IRS) in unpaid taxes.
According to the Stipulated Factual Basis in the plea agreement, Scott earned more than $2.4 million in gross receipts between 2004 and 2009, and failed to file timely tax returns for those years. In an attempt to avoid paying his tax liability and evade assessment of future income taxes, Scott intentionally hid assets and went to great lengths to remove those assets out of his name. He cashed checks totaling approximately $722,000 at local check cashing stores. Scott received wire transfers from customers into a bank account established under a third party’s name. The third party stated that Scott told him he needed a third party to open a bank account because Scott owed money to the IRS.
Each year, U.S. Attorneys’ Offices around the country work with the IRS to enforce the nation’s tax laws.
“Our office will continue to prosecute those who intentionally violate tax laws. Internal Revenue Service agents and federal prosecutors are working together to protect the public and hold violators accountable,” said U.S. Attorney Finley.The U.S. Attorney’s Office has prosecuted cases for Failure to Report Income, “Structuring” to Hide Income, Fraudulent Tax Preparers, and Stolen Identity Refund Fraud.
“The defendant attempted to hide income from the IRS in order to avoid paying taxes,” Finley said. “His actions were a willful violation of tax laws. This should serve as a reminder to those who refuse to play by the rules that they will be prosecuted to the fullest extent of the law.”
“The term voluntary compliance means that each of us is responsible for filing a tax return when required and for paying the correct amount of tax,” according to IRS Criminal Investigation’s Acting Special Agent in Charge Damon Rowe. “That responsibility should not be taken lightly. Mr. Gary Scott chose to ignore his duty to file and pay taxes and is now a convicted felon with a prison term to serve.”
The IRS office of criminal investigations in New Orleans conducted the investigation. Assistant U.S. Attorney Howard Parker prosecuted the case.
Kuchera Brothers Plead Guilty to Fraud Against the Government and ConspiracyRead the Press Release
Fines and Penalties of $4M to be Paid Back to USA
JOHNSTOWN, PA. - Two brothers who owned a major defense contracting firm waived indictment and pleaded guilty today in federal court to charges of major fraud against the government and conspiracy, United States Attorney David J. Hickton announced.
William Kuchera, 58, of Summerhill, Penn., and Ronald Kuchera, 51, of Johnstown, Penn., pleaded guilty to two counts before United States District Judge Kim Gibson.
In connection with the guilty plea, the court was advised that William and Ronald Kuchera owned and managed Kuchera Defense Systems, Inc. (KDS), a contractor for the Department of Defense. KDS submitted cost certifications to the government containing unallowable expenses that inflated costs for overhead and general and administrative expenses. These unallowable expenses included the leasing of a private airplane, vacations to Jamaica, personal car leases, improvements on a private residence and lobbying fees.
The Kuchera brothers also submitted a false invoice for $650,000 to Coherent Systems International, Inc. (Coherent), a defense contractor owned by Richard S. Ianieri. As the prime contractor, Coherent was responsible for an $8 million Department of Defense contract for the Ground Mobile Gateway Systems, which involved the development of a new prototype unmanned vehicle that was designed to prevent friendly-fire incidents. The invoice sought payment for a component that had never been manufactured or delivered to Coherent. After receiving the $650,000 payment from Coherent, the Kuchera brothers kicked back to Ianieri approximately $200,000.
The court was further advised that each of the Kuchera brothers filed false income tax returns for themselves and KDS. Their personal tax returns were false because they failed to disclose as income certain personal expenses paid for by their companies. The KDS tax returns were false because they included as business deductions certain expenses that were personal expenditures of the two brothers. The brothers also caused the submission of a false corporate tax return which illegally claimed the kickback to Ianieri as a legitimate business expense.
In July 2009, Ianieri pleaded guilty to a one-count criminal information charging him with soliciting kickbacks and filing false purchase orders related to an Air Force contract in Florida. In February 2010, he was sentenced to five years probation and was ordered to pay a $200,000 fine.
Each brother also agreed to pay a $50,000 criminal fine to the United States. Ronald Kuchera agreed to the civil forfeiture of an additional $450,000 and agreed to make payment to the Internal Revenue Service in the amount of $121,313, which represents taxes owed due to his filing of false personal tax returns and his share of the taxes owed by KDS. William Kuchera similarly agreed to the civil forfeiture of $450,000, and to pay restitution to the IRS in the amount of $257,168.
The Kuchera brothers and KDS will also pay $2.7 million to resolve their civil liabilities with the United States Department of Defense under the False Claims Act. Ronald Kuchera will pay $950,000 and William Kuchera will pay $829,566. KDS, now doing business as Currency, Inc., will pay $920,434 as a result of an audit conducted by the Defense Contract Audit Agency, which uncovered inflated billings for overhead.
“The Kucheras cheated the government by claiming improper reimbursements, submitting a false invoice, and then kicking back $200,000 to the prime contractor,” said U.S. Attorney Hickton. “Such blatant and outrageous fraud against the United States cannot and will not be tolerated.”
Judge Gibson scheduled sentencing for Oct. 7, 2013. The law provides for a total sentence of 15 years in prison, a fine of $1,250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offenses and the criminal history, if any, of the defendant.
Assistant United States Attorneys Nelson P. Cohen and Paul E. Skirtich are prosecuting this case on behalf of the government.
The Defense Criminal Investigative Service, the Defense Contract Audit Agency, the U.S. Internal Revenue Service, Criminal Investigations, and the Federal Bureau of Investigation, conducted the investigation that led to the prosecution of William Kuchera and Ronald Kuchera.
Kaufman County Man Guilty of Methamphetamine ViolationsRead the Press Release
Department of Justice
Office of Public AffairsTYLER, Texas – A 44-year-old Terrell, Texas man has pleaded guilty to federal drug trafficking violations in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.
James Clinton Squires pleaded guilty to conspiracy to distribute and possession with intent to distribute methamphetamine today before U.S. Magistrate Judge Judith K. Guthrie.
According to information presented in court, on Aug. 2, 2012, Squires distributed approximately 8 grams of methamphetamine to Jason Ray Ragan in Terrell, Texas. Squires knew Ragan intended to return to Gregg County, Texas with the methamphetamine for redistribution in the Eastern District of Texas. Squires also admitted to possessing more than 50 grams of methamphetamine at his residence on Aug. 3, 2012. In addition to supplying drugs to Ragan, Squires also traveled to Tyler, Texas; Lindale, Texas, and Pritchett, Texas to distribute methamphetamine. A federal indictment was returned on Sep. 12, 2012 charging Squires and Ragan with federal drug crimes.
Ragan pleaded guilty on Feb. 6, 2013 and is awaiting sentencing. Squires faces a minimum of 10 years and up to life in federal prison at sentencing. A sentencing date has not been set.
This case is being investigated by the Drug Enforcement Administration and the Texas Department of Public Safety prosecuted by Assistant U.S. Attorney Mary Ann Cozby.
Kansas City, Kan., Man Pleads Guilty to Enticing A California Girl for SexRead the Press Release
KANSAS CITY, KAN. – A man from Kansas City, Kan., has pleaded guilty to using the Internet to entice a 12-year-old girl in California to send him pictures of her naked, U.S. Attorney Barry Grissom said today.
Robert Dobbertin, 40, Kansas City, Kan., pleaded guilty to one count of enticing a minor. In his plea, he admitted that in October 2008 a woman in Orange County, Calif., discovered that her 12-year-old daughter was involved in an on-line relationship with him.
The girl met Dobbertin through the Web site Teenspot.com. Dobbertin sent instant messages to the girl and talked sexually to her on the phone while engaged in masturbation. He asked for and received naked photographs of her. He asked her to perform sexual acts on herself. He sent her a video of himself masturbating and a digital photo of his penis.
When investigators served a search warrant at Dobbertin’s home in May 2009 they seized a computer containing child pornography and the records of two Yahoo! Messenger chats in which Dobbertin talked about his plans to travel to California to visit the girl and expressed a desire to have sex with her.
If convicted, he faces a penalty of not less than 10 years and not more than life in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Christine Kenney is prosecuting.
Jury Convicts Darke County Man of Receipt and Possession of Child PornographyRead the Press Release
CONTACT: Fred Alverson
Public Affairs Officer
DAYTON – A U.S. District Court jury here convicted Richard Trepanier, 40, of Gettysburg, Ohio of one count of receipt of child pornography and one count of possession of child pornography.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Robert A. Hughes, Acting Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the verdict returned today following a trial that began April 10.
Testimony during the trial showed that Trepanier using the name “Wingman66” contacted an Australian Federal Police undercover officer patrolling the internet in February 2008 and offered him images of child pornography. The Australian authorities tracked the user name to Trepanier and sent the information to the FBI’s office in Cincinnati.
FBI agents interviewed Trepanier who consented to a search of his computer by the Miami Valley Regional Computer Forensics Laboratory. Their analysis identified approximately 56 images of child pornography and evidence that Trepanier was trading child pornography.
“This case demonstrates the international cooperation that is necessary to protect children from exploitation,” U.S. Attorney Stewart said.
The penalty for receipt of child pornography is a prison sentence of at least five and up to 20 years in prison. Possession of child pornography is punishable by up to ten years in prison. Judge Thomas M. Rose presided over the trial and remanded Trepanier to the custody of the U.S. Marshals Service immediately after the jury returned their verdict. Judge Rose will schedule a date for sentencing following an investigation by the court.
This case was brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorneys Offices, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
U.S. Attorney Stewart commended the cooperative investigation by the agencies involved, as well as Dayton Branch Chief Laura Clemmens and Assistant U.S. Attorney Christy Muncy, who are representing the United States in this case.